Global Marketing

International Market Communications & Global Advertising

What is International Market Communications? 

International market communications includes all methods companies can use to provide information to and communicate with existing and potential customers. This can be greatly influenced by many factors such as cross-county cultural differences (language, economic, socio-cultural, legal and regulatory). Some examples of different forms of international marketing communications are advertising, sales promotions, direct marketing and public relations. Depending on the type of industry, the medium of communication may vary in importance. For example, in the consumer goods industry advertising may be extremely prevalent. However, in business-to-business marketing, public relations and relationship building is much more crucial.

The Rise of Global Advertising 

Due to both the rise of technology and globalization, global advertising as a form of international market communications has become extremely prevalent into today’s marketing universe. However, while some companies implement adaptive advertising strategies that are geared towards each culture, others opt for a more standardized approach that is more cost efficient. Advertising can either be used to reach a mass audience or a precisely defined market segment. While it can be very cost efficient when used to reach a mass audience, traditional mass audiences are fragmenting due to increasing media options and various forms of channels to reach the target consumer. Digital communication (Internet, mobile) is the fastest growing form of advertising, while traditional media (newspapers, radio, magazines) are struggling for relevance. Advertising is utilized to build awareness, inform, persuade, and remind! The number one challenge globally –  How can your brand stand out from the crowd? A Yankelovitch study shows 65% of people feel “constantly bombarded” by ad messages, with 59% feel ads have little relevance. Various global advertising channels include TV, radio broadcasts, newspapers, magazines, Internet, many physical facilities, transit vehicles — all cluttered with ads.

Barbie & the Standardized Advertising Approach

Mattel Inc. is a great example of a firm following a global advertising approach. Mattel is the world’s largest toy company and the firm’s best selling brands include Barbie, Hot Wheels, Fisher-Price, and American Girl. Mattel utilizes a standardized marketing strategy, even selling the same original Barbie in 59 countries. Barbie uses advertising forms other than the normal traditional advertising methods, relying on its movies and partnerships with corporations like Facebook and Volkswagen to stimulate large doll sales. One example is one of Matel’s highest selling Barbie worldwide is the Rapunzel doll. 

Essentially, if demand is the same in every single market, and technology and communication is homogeneous, companies should go for a standardized international marketing approach. Especially with travel and globalization, commonalities get spread and can make for a global environment that could be suited for a standardized international market communication approach. It is crucial to react to your audience, industry and demand in all international marketing channels. For example, due to the brand’s shun for its unrealistic portrayal of women at a time when society in many countries was moving towards gender equality and inclusivity, Mattel overhauled Barbie with a diverse product lineup that includes dolls of all shapes, sizes and ethnicities to better portray a variety of cultures, all sold worldwide. 

New Barbie advertising promoted a message of the power of play and portrayed the new Barbie as someone kids aspire to be. Barbie's most successful recent advertising campaign include the “Dream Gap” which prevents girls from realizing their full potential as adults because of societal constraints. This change towards both ethnicity representation and new advertising strategy made an impact not only globally, but in Barbie’s homeland. 

Global Marketing

Global Marketing Channels & Global Retailing

Global Marketing Channels 

Marketing channels are crucial both on a global and domestic level, and ultimately create utility for the customers. The physical flow of goods or services through channels is how companies can distribute and market their brand. Channels are made up of a coordinated group of individuals or firms that perform functions that add utility to a product or service. This leads to the crucial question, what is utility to the consumer?

There are different types of utility, including place, time, form and information. The first is place utility which is availability of a product or service in a location that is convenient to a potential customer. Time utility is when a product or service is available when it is desired by a customer. For example, Amazon’s global distribution and supplier networks allow for their brand to reach consumers on a global level, by getting products to customers when they want it, in an extremely convenient fashion. 

The third form of utility is form utility. This represents the availability of the product processed, prepared, in proper condition or ready to use. Finally, information utility is the availability of answers to questions and general communication about useful product features and benefits. Utility is critical for successful global marketing channels to be in place, and there are many supporting activities to global marketing channels and to the company’s value chain. These include transportation/physical distribution, supply chain management, logistics management, order processing, warehousing and inventory management. 

Marketing Channel Choice

These channel decisions are extremely difficult to manage globally because of the variation in channel structures from country to county. It’s important to have a channel strategy that aligns with the firm’s core competencies if they hope to develop a competitive advantage in new markets. One channel innovation that has grown in popularity is piggyback marketing. This is when one manufacturer distributes products by utilizing another company’s distribution channel. This requires that the combined product lines be complementary and appeal to the same customers. This can be further broken down into B2C marketing and B2B marketing. Business-to-consumer marketing utilizes consumer channels and may be relatively direct, utilizing direct mail or selling, as well as manufacturer-owned stores. Where on the other hand business-to-Business Marketing employs industrial channels to deliver products to manufacturers or other types of organizations.  Finally, one that is extremely relevant to today is peer-to-peer marketing, where the internet serves as a great resource for a global marketing channel and is very accessible to everyone. 

Global Retailing 

One major global trend is the rise of many successful retailers who are increasingly expanding around the world, including department stores, specialty retailers, supermarkets, and many more (one of the biggest of them all being Amazon). Amazon achieved success on a global scale through e-commerce and reaching its customers via the Internet. However, with the acquisition of Whole Foods and launch of Amazon Go, Amazon marketing channels expanded even further through various methods of global retailing. There are many competencies that have to be used strategically to enter a new market such as selection price, store location, and customer service. Global retail expansion can be achieved through many marketing channels such as organic growth, franchising, acquisition and joint venture. Amazon was able to utilize its expansive marketing channels in order to stimulate massive growth domestically and globally. 

Global Marketing

International Pricing

Why is an international pricing strategy essential?

According to Dr. Eckhard Kucher, the primary objective of an international pricing strategy is to maximize total profitability across countries, while reducing the opportunity for potential global issues to arise. One such issue is parallel trade, where identical products are sold at significantly different prices in different countries, and therefore traded without approval of the owner. The threat of such parallel trade is especially prevalent in intellectual property-intense industries such as pharmaceuticals. In an effort to prevent this, a successful international pricing strategy should maintain an optimal price that is equitable with the consumer’s perceived value of a good or service.

Finding the optimal international pricing strategy for your business:

A number of different international pricing strategies exist, so it is important to find one that is the best fit for your particular business model. Below, we have summarized some of the most relevant characteristics of each.

  • Penetration Pricing: The primary focus of this strategy is entering a new market and obtaining significant market share with a low price upon introduction of your good or service. You should ideally have the financial stability to face reduced profit margins for a period of time before economies of scale are established.
  • Flexible Pricing: This strategy works best when your good or service appeals to a multitude of consumer groups in the same market, where a different price is optimal for each group. For instance, some segments may place higher importance on quality and accept a higher price point, while another segment may be seeking the greatest value for their money and therefore not willing to pay a premium. This strategy should be employed when there is demand for your product in nearly every corner of the market, whose unique needs can only be satisfied through flexible pricing.
    • Example: A company that may choose to utilize this strategy for international expansion is Levi’s. They offer jeans through luxury retailers priced as high as $278, while they also distribute through lower-end department stores with a pair of jeans starting around $40. This flexible strategy allows them to cater to segments of the market that place significant importance on premium quality and brand image, while still servicing those looking for value at a low price.
  • Static Pricing: When a company faces high costs upon entering a new market, they may be inclined to implement a static pricing strategy, or one single price throughout a market, due to its ability to reduce administrative and operating costs. However, this can be a risky strategy due to competitors’ ability to easily identify and beat your pricing – in an industry with low switching costs, this could prove detrimental to your ability to establish significant market share.
  • Price Skimming: This strategy is optimal for a business introducing a good or service that has incurred high costs and has intentions of efficiently and effectively gaining a return on investment. A high price is charged initially, but is likely not sustainable in the long-term as competitors begin to understand and replicate similar offerings at lower prices. This practice is common in high-tech industries where extensive and costly research is conducted during the inception of a new product.
    • Example: Apple charges high prices for new iPhone models in each market they enter, until competing brands introduce comparable technologies and prices are eventually driven down.
Global Marketing

Global Branding

What is Global Branding?

Global brands are brands that are recognized throughout much of the world. Many companies intend to create global brands through various marketing and branding efforts. This global branding strategy is when a company effectively offers a product or service where the advertising, positioning, strategy, personality, that successfully look and feel are the same from one country to another!

This approach essentially means utilizing standardized global advertising and global marketing strategies. This method allows for a company to gain a sustainable competitive advantage by developing a product or service that is recognized worldwide, regardless of the country, continent or region where it is marketed. There are many brands which do a great job at this, such as Apple, Coca-Cola, Starbucks, Nike, and McDonalds. These products and services, or brands, are relatively the same whether they are being sold in China, Japan, Russia, Europe, or many other countries or regions worldwide. These companies are able to use a very similar marketing strategy successfully in order to promote the brand everywhere the brand is offered, regardless of the country or region.

Benefits of Global Branding 

There are many benefits of global branding. First of all, it can greatly help a company’s profit margins. Brands with a strong, well-known global presence create strong brand awareness and brand loyalty, which allows companies to charge a premium because consumers are willing to pay more for products they perceive as dependable, of high quality, and that provide consistency. It also can create a stronger competitive advantage for companies. Once a company is able to successfully compete locally, or even within a nation, it makes sense to expand globally. It increases customer awareness for a company, improving and creating a cohesive customer perception of a brand on a global scale. Some other advantages to creating a strong global brand include improved perceptions of product performance, economies of scale, less vulnerability to competition, greater trade cooperation, and increased marketing communications effectiveness.  

Using a standardized global branding approach may be cheaper and more effective for companies to create ads locally than to import ads and then adapt them for each market, but could prove to create many challenges if not executed perfectly. Cultural differences may make it hard to pull off a global campaign, proving it to be extremely important to find the perfect balance between a standardized and adaptive global branding strategy. For example, a brand’s image may not be the same throughout the world. Honda means quality and reliability in the United States, but in Japan, where quality is a given for most cars, Honda represents speed, youth, and energy.

Starbucks & Their Global Branding Success 

Starbucks was founded in 1971 in the city of Seattle, and is responsible for creating the concept of a third place between home and work where people can relax, enjoy a cup of coffee and experience the inviting ambience. Global branding has been one of the pivotal elements of Starbucks strategy over many years, with the company investing significantly in creating a standardized look and feel of its stores, merchandise and food and drinks. The Starbucks logo has become one of the most recognizable logos in the world and their global expansion strategy has a key objective of recreating the Starbucks experience in every new country the company enters. The consistency of Starbucks branding and experience is what has made it an internationally recognized brand. Starbucks' consistent brand message spans every communication medium, every piece of branded collateral they create, and every aspect of their in-store design and experience.

Global Marketing

Cross Cultural Consumer Behavior

Why analyze consumer behavior?

Consumer behavior analysis can help marketers to develop products and campaigns that appeal to an individual or group of consumers. By understanding the thought process behind consumers’ problem recognition and decision-making, marketers can tailor their products or services to resolve the unmet needs or desires of consumers, leading to strong brand loyalty and increased market share.

Going Global

While we can see the necessity for studying consumer behavior, in the modern marketplace it is essential to extend this practice further and conduct cross-cultural consumer behavior analysis. Due to the vast differences that exist between cultures around the globe, what appeals to one market and drives them to make a purchase may not be relevant in another region. 

The following elements are some of the most important to take into consideration when developing an understanding of cross-cultural consumer behavior:

  • Language: Though spoken language is a given, unspoken language and physical cues play a significant role in a culture’s social interactions. For example, certain gestures and hand signals have been known to hold polite or friendly meanings in one culture, but are considered disrespectful or rude in other cultures. A classic fable of misunderstood language acting as a barrier across cultures was Chevorlet’s supposed launch of the Chevy Nova in predominantly Spanish-speaking countries. Because the name ‘Nova’ appeared to be the Spanish words ‘no’ and ‘va’, translating to ‘no go’, consumers were unenthusiastic about purchasing a car whose name represented underwhelming performance of the vehicle. Therefore, when expanding your business internationally, you should develop an understanding of both spoken and unspoken languages in order to prevent potential failed product launches or advertising campaigns.
  • Values: Values and norms tend to vary drastically from culture to culture, and even within subcultures, making them an essential area of analysis when understanding cross-cultural consumer behavior. Values are also high predictors of what brands and messaging a consumer will identify with when seeking to fulfill his or her unmet needs. To directly compare the complexities of cultural norms in numerous countries, one can utilize Hofstede’s ‘Compare Countries’ tool, which will generate a side-by-side comparison of up to three countries, charting their relative levels of individualism, power distance, masculinity, uncertainty avoidance, long-term orientation, and indulgence. 
  • Aesthetics: Though one may assume the design aesthetic of a brand, product, or advertisement could be maintained throughout global expansion, different cultures may have very different aesthetic preferences – even down to the most minute details such as color. For instance, in the United States and Europe, black is considered to be the color of mourning and death, whereas in Japan and many eastern Asian countries, white is the color that holds this symbolic meaning. Therefore, international marketers should maintain careful awareness of the nuances in design aesthetics when entering new cross-cultural markets.

Global Marketing

Global Market Intelligence

What is Market Intelligence?

Market intelligence is the gathering and analyzing of information relevant to a company’s external environment, and is often part of a company’s strategic planning function, specifically for the purpose of accurate and confident decision making in determining market opportunities This insight can be useful for developing market strategies for how to penetrate new markets and is EXTREMELY necessary and useful for when entering a foreign market and expanding globally.

Market intelligence and market research are commonly associated and similar, however serve different purposes for a company. Market research and the information compiled from market research is commonly conducted when developing a new project, product, or entering a new market. This information is statistics, number and data about the external environment such as customers, competitors, and other factors. However, market intelligence is what is taken away from analyzing this data and how to continue what strategies, target customers, and specific campaigns marketers should implement from these interpretations. 

For example, having a deep understanding about your competitors, their position in the market, and the pricing strategies are all extremely crucial to understand how your company can combat them and compete: 

  • Competitors: How are your competitors positioned and how do they communicate their proposition? Studying and understanding how your competitor is pricing and placing its products can help marketing managers gain a larger share of buyers in that same market. 
  • Customer Behavior: What influences are there on purchasing decision process such as language, ethnicity, race, religion and lifestyle?
  • Potential Local Partners: Research to find possible reliable partners who know the market can be useful when expanding globally 

Essentially, understanding both your current and potential customer in the senses of who they are, what they want, and their level of satisfaction or loyalty is crucial in implementing correct marketing strategies and campaigns, especially when entering a new market abroad! Having that timely information regarding marketing and operations including areas such as innovation, product development, promotion and pricing can help a company gain the competitive advantage they’re seeking and brand their company or product successfully. 

Image result for airbnb world map

The Strategic Importance of Market Intelligence when Expanding Internationally

Collecting market intelligence before expanding internationally is strategically imperative. Market intelligence can help you both develop strategies in specialic countries or regions, and even allow you to find out new opportunities and whether or not you should even enter that specific market! Understanding the where, why, and how of stepping into a foreign market can help you optimize your companies strengths and aligns them to develop the most effective strategy. This knowledge can let you adapt and innovate your product to appeal to customer preferences in many new markets that you wish to enter and can make or break a brand’s success. For example, Groupon famously tried to move into China and ultimately lost because of their lack of cultural understanding and China’s saturated group-buying market.

Airbnb & Global Market Intelligence

Many travelers all across the globe now turn to Airbnb as their go-to site for finding a local place to stay while on vacation as opposed to hotels. Creating an international network through marketing intelligence helped Airbnb grow its brand across various markets globally. Having a local presence in key areas is crucial for the company to uphold their home-away-from-home brand.

For Airbnb, adapting to the customs of the culture in the market they want to move into is crucial for success. One of the major tools that Airbnb uses in order to localize quickly and distinguish themselves is Polyglot.js which allows them to quickly translate commonly looked at texts and gain more insight in new global markets. Ultimately, by taking advantage of market intelligence in order to successfully localize many different markets and cultures, Airbnb was able to conquer the travel industry by creating a unique and personalized travel experience catered to a diverse customer base.

Global Marketing

Global Marketing Strategy

What Differentiates a ‘Global’ Marketing Strategy?

Many companies have a thorough understanding of the marketing tactics used to strategize in their home country, but what happens when the decision is made to pursue business across foreign borders? The development of a successful global marketing strategy involves a series of choices and careful analyses of the local region, which can be simplified into the following steps:

  1. Identify the market you wish to enter: Conduct thorough research on the potential global marketplaces in which you may choose to expand your product. You will want to forecast the likelihood of successful growth in this market, the long-term sustainability of your product or service in this environment, and the overall potential demand for your business in the area.
  2. Design your strategy: Once you have identified an international region with suitable demand and promising growth, you can begin to develop your global marketing strategy. This is where the complexity of the global aspect comes into play – your company must do more than enter a foreign market and translate your existing marketing practices into their language. You must develop an in-depth understanding of the culture, values, and preferences of the locale. Depending upon your goals as an organization, and how these cultural nuances align with your existing practices, you may choose some variation of the following 3 global strategies as discussed in Pankaj Ghemawat’s framework.
    1. Adaptation: A strategy that seeks to adapt to regional preferences, changing some aspects of the business in the process.
    2. Aggregation: A standardization strategy that finds synergies amongst global markets, allowing for the creation of expansive economies of scale.
    3. Arbitrage: A cost reduction strategy that aims to optimize each element of the supply chain, often locating different parts in different areas that best utilize the unique economies and offerings of the region.
  3. Strategy implementation: Once you’ve selected an approach to global marketing strategy that best suits your business’s needs and the preferences in the global market, you are ready not only to begin developing a plan to implement your strategy, but also to analyze its success. I find it important to determine KPIs, or key performance indicators, that will allow you to benchmark the success of your global marketing strategy relative to your projected goals. Through consistent monitoring of consumer responsiveness to your global marketing techniques, you can develop a comprehensive understanding of whether you selected the best global marketing strategy for your needs, as well as if there are any areas that can be improved upon to further propel your company’s international success.

Our Top Picks: Best of Global Marketing Strategies

We’ve rounded up 3 companies that we think have done an outstanding job at creating and implementing unique, effective global marketing strategies. These companies can serve as both references and inspirations when developing your own global marketing strategy.

  1. Spotify: The Swedish born music streaming platform has reached astronomical success across 17 countries by adopting an out-of-the-box global marketing strategy. They determined what most music streaming consumers had in common regardless of region, which was determined to be a desire to discover new content. In order to deliver this new content to their international markets, they thought beyond the confines of music genres, instead adapting their recommendations to things such as mood and lifestyle. This allows their service to adapt to the unique desires of consumers across various marketplaces, while maintaining one standard service.
  2. LEGO: The iconic building blocks brand was able to use a global standardization strategy due to their primary, heartfelt belief: “Creativity and building are common to all children.” Originating from Danish origins, LEGO has proven itself to be a global phenomenon loved across cultures. Though overall products essentially remain standard, LEGO did adopt an adaptation strategy in regards to their marketing tactics when they realized that the promotional concepts they employed for their American products – such as free miniature gift packs of blocks included with the purchase of larger sets – were not garnering the same consumer receptiveness across markets. 
  3. McDonald’s: Who isn’t familiar with those famous golden arches? Thanks to McDonald’s widely-implemented global marketing strategy, they’ve developed not only an iconic and instantly recognizable brand, but also a global presence that spans every operating continent in the world. Their strategy focuses heavily on adaptation, with food selections varying to match consumer taste preferences in each region. Even outside of the continental United States, Hawaiian McDondald’s locations feature items such as spam and rice, staples of the local diet. In India, the chain focuses on offering more plant-based selections due to religious dietary restrictions that would prevent many customers from consuming McDonald’s typical range of beef products. Beyond menu items, McDonald’s also has made an effort to adapt the physical appearances of their stores to the surrounding region, for example, the French Champs-Elsysees location pictured above features an ultra-modern, black exterior with sleek minimalist furniture inside to match the high end atmosphere of the surrounding area. This exemplifies the cultural intricacies that must be studied and understood before adopting a global marketing strategy.
Global Marketing

International Marketing Environment

What is an International Marketing Environment?

International marketing environments can consist of many forces and factors that can greatly affect marketing managers decisions and intentions for marketing products. The difference between cultural environments can consist of influences of religious, family values, educational and social systems within marketing systems. Failure to consider these cultural differences when creating an international marketing strategy can be a primary reason for many company’s  failure.

For example, in Canada, language has a major influence on how marketing campaigns must be launched, since a product must be presented in both English and French, which directly affects product marketing and additional product costs. Colors also have different meanings in different cultures, and can change how a brand and/or marketing campaign is perceived by consumers abroad. Ultimately, every consumer’s values arise from his/her moral beliefs that are learned through experiences. Understanding these cultures on a deeper level can drastically change a brand’s strategies and marketing decisions!

Swiffer’s Failure to Launch

I remember one of the most interesting examples of how culture can affect an entire marketing strategy was Swiffer’s “Quick and Easy” branding campaign was completely shunned by women in Italy, greatly varying from it’s success in the United States. Italian women are known for keeping some of the cleanest homes around, spending on average 21 hours a week on household chores. Swiffer assumed this should make them the perfect consumer for cleaning products, especially one that is known for its convenience and ease. However, after many interviews and studies they found that Italian women believed that the amount of work they put in to keeping their house’s clean is a direct correlation to how much they love their family. Some women even referencing how using such product’s feeling like “cheating.” They want tough cleaners, NOT timesavers. Thus Proctor & Gamble had to completely re-brand and market the Swiffer product, adjusting to the new external environment. This a major insight that affected the company’s success in penetrating a new market abroad.

How Companies Can Adapt Going Into 2020

Deloitte published its first ever Global Marketing Trends report for 2020, detailing themes for marketers around the world to focus on in the coming months. Here, we’ve recapped the most important themes for your business to adopt when developing an international marketing strategy.

  • Consumer Participation: With the plethora of pop-ups and interactive experiences, it is no surprise that consumer participation was deemed a top global marketing trend for the upcoming year. Deloitte Global CMO Diana O’Brien states that by establishing new methods of consumer participation on a global scale, “businesses can turn willing customers into brand ambassadors, influencers, advocates, collaborators, and even innovators.” I recently encountered a relevant application of this concept as I read about Louis Vuitton’s new restaurant venture. They are expanding across international markets to create the ultimate ‘consumer participation’ in the form of a luxury restaurant located on the fourth floor of their Osaka, Japan flagship store. As they penetrate the luxury experiences category, it will be interesting to see how Louis Vuitton continues their growth within the numerous geographical markets they serve.
  • Experience Debt: Experience debt is a result of unintended consequences of our digital age – this includes things such as isolation and lack of personal fulfillment caused by technology. How is this relevant to international marketing? It is believed that marketers can ‘pay off’ this experience debt through increased cross-cultural human experience that reflects a common goal between businesses and consumers of various backgrounds.
  • Adaptation: It is essential for businesses to be readily willing and able to adapt to ever-shifting cultural environments. In a marketplace where consumers across the globe are treating brands as more ‘disposable’, marketers will need to utilize data and understand cultural intricacies to generate meaningful brand relationships that generate consumer loyalty.