Categories
Global Marketing

Personality within Cultures

When expanding into a new market, it is important to determine how it is different than the home-culture. Will the new market be receptive to the product as-is or do changes need to be made? How do you market the product? A starting point is Hofstede's Cultural Insights, where you can compare the Power Insight, Individualism, Masculinity, Uncertainty Avoidance, Long Term Orientation, and Indulgence across countries. However, many Western Countries describe themselves in terms of personality traits. This lead to the development of the Five-Factor Model, also known as OCEAN. The five traits are: Openness to Experience (O), Conscientiousness (C), Extroversion (E), Agreeableness (A), and Neuroticism (N). This model is the most popular model to determine personality.

  • Openness to Experience: depth and complexity of an individual's mental life and experience. This refers to a person's willingness to try new things and think outside of the box.
  • Conscientiousness: ability to control impulses and actions in a socially acceptable manner.
  • Extroversion: extroverts vs. introverts. This is based on how a person draws energy and interacts with others.
  • Agreeableness: how well people get along and interact with others.
  • Neuroticism: based on how confident a person is in their own skin.
https://scholarworks.gvsu.edu/cgi/viewcontent.cgi?article=1038&context=orpc

A key difference between the OCEAN Model and Hofstede's is that OCEAN can map individual people's personalities, not just the country's identity as a whole. In addition, it can aid in determining the demographics of the people who buy a product.

Heat maps of the geographical distribution of personality in Great Britain by.

(A) Regional differences in Extraversion. (B) Regional differences in Agreeableness. (C) Regional differences in Conscientiousness. (D) Regional differences in Neuroticism. (E) Regional differences in Openness. For each personality trait, the areas in blue are comparatively low and the areas in red are comparatively high.

https://doi.org/10.1371/journal.pone.0122245.g001

Hofstede focuses on culture, whereas OCEAN focuses on the personalities within the culture. The more individualist look of OCEAN will allow for more insight, and can aid in determining if different parts of the country have different personalities, as viewed above with Great Britain. The OCEAN model can be used in conjunction with Hofestede's model to get a more in-depth view and allow for more focused marketing.

Source: https://positivepsychology.com/big-five-personality-theory/

Categories
Global Marketing

Coronavirus Strikes

Coronavirus has taken over our lives, no matter where you live, from working-at-home, to stay-at-home orders, to people getting sick.  This has taken a major toll on consumption for all industries. Given the losses the companies are seeing, how are they marketing during this time?  While it is still too early to determine long-term effects, we are already viewing implications in the short-term, such as:

  • The cancellation of all sporting events, has led to less advertising and sponsorships for companies, athletes, venues, and restaurants.  This could lead to less consumer consumption of products.
  • Marketing events are also being canceled.  For some of these companies, there are sunk costs for which there will be no return on investment (ROI).
  • There will also be delayed, less, or no ROI on events like the Olympics, company retreats, conferences, sporting, and marketing events, and non-profit fundraisers that have been postponed, will be live-streamed, or cancelled.
  • In the UK, there has been a decrease in spending on TV.  This is mostly a precautionary measure, yet revenue is estimated to have decreased by 10% (Jeffries).  On the other hand, it is expected that there will be an increase in digital ad spending, especially on social media.  To date, there has been an increase in influencer engagement by 76% (Jeffries).
  • There will be a trend towards e-commerce, given the stay-at-home orders.  This pairs well with the increase in social media marketing.
  • There has been a shift from promoting premium products to everyday items or lower-priced (sale) items, such as toilet paper and basic clothing, including sales at GAP and Nordstrom.  This is because consumers are worried about money and are not thinking about the expensive items. Toilet paper has become such a hard-to-find commodity that there is a third-part Costco website dedicated to telling consumers if toilet paper is instock at their costco.
  • The airline industry has also been hit very hard, as most people have ceased all travel.  Airlines are offering extensions on frequent flier mileage programs, changing all flights for free for the next x period of time (it keeps on extending), and are even offering flights at lower prices.  Planes are also being repurposed to move medical equipment. While this is most likely to help pay the bills and staff, without any advertising it also increasing their brand image.
#HomeTogether from HGTV

In addition, brands are taking on a new tone when advertising.  Nowadays, television channels are advertising based on the #stayathome campaign.  For example, HGTV created a new commercial “#HomeTogether”. Burger King even has a new commercial stating that they have taken extra precautions to keep their customers safe. Hotels.com came out with a commercial where their mascot “Captain Obvious” is shown with the text “He’s going to be social distancing for a while, and you should, too.”   I think that these commercials have good intentions, but the ROI is yet to be seen. Either way, they are not looking for people to currently leave their house and gather, but are working with the government to keep the community safe.

It is not a surprise to see a decline in expensive forms of advertising, given the large number of jobs that have been lost.  The question is, how does marketing revive itself after the Coronavirus pandemic has passed?

Adams, Peter. “How Coronavirus Could Impact Marketing, from e-Commerce to the Olympics.” Marketing Dive, 28 Feb. 2020, www.marketingdive.com/news/how-coronavirus-could-impact-marketing-from-e-commerce-to-the-olympics/573176/.

Jeffries, Ben. “Coronavirus and the Marketing Industry: What Happens next?” The Drum, The Drum, 20 Mar. 2020, www.thedrum.com/opinion/2020/03/20/coronavirus-and-the-marketing-industry-what-happens-next.

Talbot, Paul. “How The Coronavirus Pandemic Impacts Marketing Strategy.” Forbes, Forbes Magazine, 19 Mar. 2020, www.forbes.com/sites/paultalbot/2020/03/19/how-the-coronavirus-pandemic-impacts-marketing-strategy/#24b98b194dc2.

Categories
Global Marketing

Challenges in International Pricing

The authors of the last blog post talked about optimal international pricing strategies. Companies face many different challenges, outside of culture, language, and government policies, when deciding which strategy to implement. These challenges mainly revolve around currency.

Export Price Escalation: Prices are often higher in foreign markets in order to ensure that export costs, such as shipping, tariffs, and insurance, are covered.

Inflation: When inflation rates are constantly fluctuating, it can be difficult to set a price in order to continuously make a profit. Companies can attempt to modify their components so that the raw materials and packaging are lower-cost. A great example of fluctuating inflation rates is Mexico. Due to the Coronavirus, inflation rates in Mexico are currently higher than expected for the year, which is leading to difficulty in buying products.


Inflation rates in Mexico for the past 5 years.
source: tradingeconomics.com

Currency Movement: Exchange rates are effected by political and economic conditions. The gains and losses by the change in exchange rate can be transferred to customers.

Anti-Dumping laws: This occurs when imported goods are sold at an unfair price. Countries are switching to anti-dumping laws due to the removal of trade barriers; these laws are supposed to protect local industries.

Countertrade: Non-cash compensation that can be used to barter (ie. exchange of raw materials). This is the largest way of indirect export and a good way to stimulate industries. However, companies can run into legal difficulties.

These factors above should be included in analysis of pricing. While a company may not change the type of pricing strategy, it could change the price points that are picked for each country, or the lowest sales price possible.

Information from: https://blog.blackcurve.com/global-pricing-issues-and-how-to-solve-them

Categories
Global Marketing

Drawing in the Customer

Have you ever wondered how that cute pair of jeans showed up on your Facebook profile?  Or the handbag you looked at earlier in the day? The answer is behavioral marketing.  In today's world, marketers can use consumer behavior to make a detailed, focused marketing campaign for each user.  This is done by using your search history, IP address, and cookies.  I went onto my Facebook page and looked at what sponsored ads were featured on my page: apartments/houses, bridesmaid dresses, and phone cases.  The first is likely based on my search history for the past two years as I was looking for a new apartment. The second is because I have been looking at dresses for my best friend’s wedding, and the third is because I bought a new phone case from Casetify recently. These companies used my previous browsing history to make targeted promotions.

Search and shopping cart information can be used for retargeting, letting someone know they left an item in their cart and/or offering other items they may like based on “previously viewed” products.  Demographic targeting is another way to use information received from internet searches to sort people by age, gender, geography, race, religion, education, etc. People can be bucketed into homogenous groups, and when a person fits certain parameters, an advertisement that should appeal to them will appear.  Let's use Pepsi advertisements as an example for demographic targeting.

Related image
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This picture is targeting all young adults who have an active lifestyle. The liveliness in this photo will stand out to a younger crowd, and the use of multiple activities will allow this advertisement to appeal to a wide range of people.

Picture found here

Just by looking at the above advertisement, one can easily determine that this is targeted toward different demographic than the previous ad.  It is still geared towards young adults, but it’s focused on people who are interested in activism and environmental friendly practices.

While I can continue along this route, I want to switch gears and take a look at how culture affects Pepsi’s advertisements.

This is an advertisement from India.  In theory, it could be used across geographies to target people who enjoy soccer.  However, the celebrity featured above is Ranbir Kapoor, an Indian actor and film producer for Bollywood.  Due to his specific audience, this advertisement will draw a bigger audience in India, and other Indian communities.

Based on search history, Pepsi and other companies can target the market based on consumer behavior.  This allows marketers to better understand their customers and help anticipate their needs. Use of targeted data gets at least a 50% better response rate than non-targeted data.

Boost Clicks and Opens
https://grapevinegroup.co.za/2017/03/06/5-important-advantages-behavioural-marketing/

What other factors do you think are important when looking at behavioral segmentation?

Categories
Global Marketing

Is Marketing Global?

In today's world, most businesses are viewed as being global; they do business all around the world. Many businesses start in a domestic market and expand globally over time. Think Amazon, Peloton, H&M. With the expansion of the businesses from a domestic market to a global one, these companies undergo the evolution of marketing. Here, I will break down the five types, or steps, of marketing.

Global Marketing Evolution

Companies start by marketing products domestically. These products are marketed irrespective of the global environment, as they do not sell their products internationally. Target, for example, is a well-known store internationally (or at least in Canada), but yet it only operates in the US. Since they only operate in one country, taking into account the global environment would not be beneficial (having failed to expand to Canada recently, they probably won't be trying international expansion for a while).

Some companies, however, undergo successful expansion. Potential international customers may ask the company to sell them products, moving them into the export marketing stage. Once comfortable with internationally-selling their products, they can start to create and market country-specific products. This is called international marketing. First and foremost, as mentioned in the previous post, the company must take into account the different cultures. Then, there are different government policies in every country. But if you have come this far and are successful…

Then maybe you should take the next step and realize economies of scale. These companies take on multinational marketing, bucketing different countries into regions based on similarities. These companies are smart, realizing that they do not need to treat every country as a separate entity, and are only one step away from being a global marketing company: full global integration and standardization.

“The multinational corporation knows a lot about a great many countries and congenially adapts to supposed differences….[whereas]…Global corporations knows everything about one great thing”

Theodore Levitt, The Globalization of Markets

Before getting back to the question of whether marketing is global, take a look at these seven marketing fails. These companies translated their slogans into another language without consideration of their true meaning.

So, is marketing global? In short, marketing can be global, however, I do not think it should be. In my mind, to market globally means you are not taking into account societal differences. One can try and find enough similarities between the countries, or sell products most countries are willing to buy as-is, however, the US is different from Brazil which is different from China which is different from India and Russia and the list goes on. As you saw in the above video, even language translation needs to be taken into account. So how do you market one product to all these people the same way? Isn't it more beneficial to stay in the multinational marketing stage and make minor changes for every market to gain market share while still realizing economies of scale?