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Global Marketing

Businesses ‘Social Distance’ from Traditional Use of Social Media

Social media has connected the global world unlike ever before, making communication easier and transforming human connection. With many people across the world staying home to prevent the spread of COVID-19, we are using social media and consuming new information at staggering rates. Many of us are having virtual happy hours or tagging friends in challenges on Facebook and Instagram, while businesses are also learning how to leverage social media in the age of social distancing.

Spreading Awareness

Companies are using their social media platforms to spread information about COVID-19 as it relates to their business. Financial Institutions are focusing on the economic impact of the pandemic including announcements about the Federal Reserve adjusting interest rates and unemployment rate predictions. Recruiters are sharing tips for resume building and interview skills. The Healthcare industry is focusing on recommendations for staying healthy such as hand-washing, sanitizing, and encouraging the use of cloth face masks.

Corporate Social Responsibility

Companies are also sharing how they are supporting their employees and their communities during this pandemic on their social media platforms. Google donated Chromebooks and mobile hotspots for rural California students. Google also donated $800 million to multiple organizations across the world to fight COVID-19 and in Google Ad credits to small and midsize businesses who are struggling during this time. Disney is supporting its employees as the senior staff, consisting of vice presidents and above, take 20-30% salary cuts. Nestle is donating food, medical nutrition products, and bottled water to countries in greatest need. Apple announced it is donating 10 million masks to the United States and Europe.

Comment below with other ways you are seeing businesses spread awareness about their efforts during this pandemic.

Product and Service Adjustment Announcements

Businesses are using social media to connect with consumers to advertise their products and services. Restaurants are advertising safety precautions for their employees and customers while also announcing their revised methods for delivery or take-out orders. My local California Fish Grill has been great with messaging what they are doing. Retailers are announcing updated policies for shipping, returns, and delivery methods. Amazon has been very proactive with these notices.

Doubling Down on Customer Engagement

Companies in all industries are using this time to strengthen relationships with suppliers, clients and consumers, as well as work towards building up new business and consumer relationships. Effective engagement will strengthen a company's brand, even in this challenging time.

Finding the right chord is important. Game Stop set a terrible example when it remained open as an “essential” business. Ultimately, both the public relations nightmare of endangered employees and frustrated consumers forced all Game Stop stores to close, moving to curbside pick-up and delivery.

Comment below with other company failures.

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

Global Branding

What is Global Branding?

A typical definition of a global brand is “a brand that is marketed under the same name in multiple countries with similar and centrally coordinated marketing strategies” (Czinkota & Ronkainen 2006). Global brands have the goal of creating and maintaining a consistent identity with consumers all over the world. This can be accomplished in a number of ways, but it is no simple task.

Global Branding Strategies

  • Solo Branding – A branding strategy under which each product that the parent company sells has its own name brand. An example of this is Coca-Cola. Each of their products such as Sprite, Fanta, Dasani, Minute Maid, etc., have their own global brand names that they are marketed and sold under individually. This strategy is beneficial for targeting specific market segments and consumer groups.
  • Hallmark Branding – In this branding strategy the firm tags one brand, generally the corporate brand, to all of the products and does not use sub-brands. Examples of this include most banks, such as Wells Fargo or Chase using the same brand name for all of the services and branches the company has. This strategy keeps the branding simple for consumers to remember and allows the company to focus on one brand name.
  • Family (Umbrella) Branding – This branding strategy focuses on the parent company brand name, and everything the company sells is under that brand name, no matter the product. An example of this is the Virgin Group, which includes Virgin Atlantic, Virgin Galactic, Virgin Mobile, Virgin Voyages, and more. This is a corporate brand name focus so that consumers associate one of the company's business units with the quality and reputation of the all-encompassing brand.
  • Extension Branding – A company with a pre-existing established brand enters a new product category using the same branding, now over multiple product categories, by extending the brand to the new markets. An example of this is Samsung, who have extended the brand from televisions to cell phones, washers and dryers, refrigerators, and more. Having established their name with a strong reputation, they extended the corporate brand name from the original product of TV's to all of the products the company offers today. This is a good strategy for a company with a pre-existing good reputation entering a similar market that people will perceive well.

Is Global Branding Worth It?

When it comes to global branding, there are as many, if not more stories of failures than successes. Companies must make many considerations before deciding on a global branding strategy. However if a company succeeds in creating and maintaining a global brand, the great level of exposure and sales that comes with a global brand make all of the marketing expenditures and difficult decisions worth it. Just make sure you are aware of the various strategies available and conduct adequate market research to improve the chances of success.

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Global Marketing

Korean Trends Crossing Cultural Barriers

In the last 18 months, the West saw a rise in Korean influence, notably within the beauty and cosmetics industry. Estimated at around $13 billion in 2017, Korean beauty, or K-beauty, trends soared across Asia and resonated across the world.

What’s all the hype about?

I went into a deeper dive into the Korean cosmetics market, and here are some interesting insights:

In recent years, K-beauty companies began to expand internationally, with hallyu (Korean Wave) culture becoming more widespread. Uniquely, “South Korea's beauty industry is typically about 10-12 years ahead of the rest of the world” says Marie Claire’s digital beauty editor, Katie Thomas, in an interview she gave to BBC News. Essentially, the pillars of the makeup industry are deeply rooted into the Korean culture, and K-beauty practices are well received across Asia and the rest of the world. To K-beauty fans, the products not only offer the best quality of the best ingredients but attached to that product is the identity value that K-beauty offers consumers. Let’s break it down:

First, skincare is the essential pillar and is “ingrained in Korean culture from a very young age to look after your skin”, explains Thomas. As such, customers who use K-beauty products will rest at ease knowing they invested their money in products that have been used for centuries. Sephora then hopped on the K-beauty train, and co-developed Kaja. This was the first U.S. – K-beauty brand partnership. K-beauty became so popular that even Business Insider compiled a list of 17 of the best Korean skin-care products you can find at Sephora.

Second, there are active ingredients and new, innovative formulas constantly being developed in South Korea that would likely not be considered in the United States, simply due to lack of knowledge of such unique ingredients’ properties (snail mucus, pearl for brightening).

Additionally, the K-beauty industry has a keen focus on facial care products rather than decorative, or makeup, products. This holistic approach is desired by consumers, and the practice is consequently embodied through K-beauty products.

Third, and more importantly, K-beauty boomed online, and thousands of bloggers published video reviews of K-beauty products on a daily basis.

Interestingly, an advantage that South Korea had over countries like the United States is the widespread use of makeup by men, and thus, the amount of social influencers and bloggers was drastically higher in South Korea, just because their target market was inherently larger.

However, that didn’t stop K-beauty from resonating with non-Koreans. That’s because the added value that K-beauty is bringing to the table is coated with an extra layer of culture. K-beauty is perfected because culturally, this has been a common practice in all Korean households, and knowledge and expertise have been passed down from generation to generation. Additionally, the novelty of unknown or new ingredients adds to the appeal of such products.

Have you ever tried K-beauty products? Let us know below!

– Maria Khalil

Categories
Global Marketing

Considerations for International Paid Social Media Marketing

In today's connected world, businesses are no longer limited to turning to their local populations for prospective customers. Advertising internationally, however, comes with an entirely new set of considerations. Different time zones, creative localization and potential issues with ad delivery are all common pitfalls. Different time zones create the potential for ads to run at the wrong times (i.e. in the middle of the night). Although many social campaigns are “always on,” for campaigns with day-parting, having the wrong start and end times can be extremely detrimental. If ads are intended to surround a particular event, missing the intended start time, ending too early or too late can also be a bad look for the brand. 

Creative localization is crucial to ensuring that the foreign audience understands the ad and isn't accidentally offended. Words can have different meanings in other cultures, and solely relying on the internet for translation may result in the message getting twisted. While top spending advertisers are able to lean on social platform partners and/or foreign colleagues who can help navigate these areas, smaller media buyers (AKA anyone who can't afford an agency) have to get innovative by reaching out to native speakers and/or cultural experts who can best advise. Social media platforms are perhaps the most complex channels to leverage internationally as they are both inherently conversational and visually driven. There are therefore more opportunities to overlook content customization for the foreign market.

When entering a new market, it can be easy to assume there are just as many addressable consumers as back home. Unfortunately, that is rarely the case. Even when the product or service is universally applicable, international daily active users for practically all social platforms pale in comparison to the North American market. In light of the often smaller audience sizes, marketers may make the mistake of not bidding aggressively enough to get their ad served. Depending on the advertiser, under-delivery (not spending in full) can actually be worse than below-benchmark performance. 

Overall, focusing on the target audience is the key to success for any paid social campaign, domestic and foreign alike. Keeping the consumer at the forefront of all media planning serves to act as a reminder to adjust the launch and end dates, change out the copy or video assets and to closely monitor delivery to ensure that ads are spending in full. Running an international social media campaign does not have to be a daunting task. With consistent communication between all parties and a clear objective, many brands can and will find success abroad.

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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

Influencer Marketing: The Next Gen Marketing Approach

A shift in marketing strategy is taking place before our eyes. As a new generation of consumers is entering the workforce, companies are beginning to adopt new marketing methods. After the internet revolution, businesses can better market their products through multiple avenues all over the world. However, this is both costly and sometimes never reaches the consumers in mind. For this reason, companies are increasingly turning to a new form of marketing – influencer marketing.

What is influencer marketing?

Influencer marketing focuses on key individuals that have large reaches in certain segments, hence the term influencer. These influencers are typically those with a large following on various social media platforms. There are two types of influencers: Micro and Macro. A micro-influencer has between 1,000 to 100,000 followers whereas a macro-influencer has more than 100,000 followers. Companies will reach out to these individuals and pay them to promote their product in a post or video. 

I know what you might be thinking. Companies have used celebrities to reach audiences for centuries. It wasn’t until Babe Ruth, Lily Langtry, and Sarah Bernhardt in the early 1900s that celebrity marketing was widely practiced. Nowadays, seemingly every celebrity is making a substantial amount of their income in endorsements. What’s the difference? I argue that celebrity marketing is targeted to the mass population. Only multi-million dollar companies can afford celebrities. With influencers, any size company is able to target a specific audience at a fraction of the cost. Even if you are a relatively new company looking for marketing opportunities, influencers are a good way to reach an intended audience.

What does it cost?

As previously mentioned, the cost of an influencer varies on their following as well as final negotiations. However, the following table provides a guideline for the potential cost per followers or views. According to the NY Post, an A-list celebrity can make anywhere between $500,000 to $2 million per commercial. For example, a 30-second advertisement with Kate Upton reportedly cost $1 million dollars. In contrast, an influencer with the same amount of followers as Kate Upton on Twitter would charge less than $5,000 for a single post in theory. From an influencer’s standpoint, there’s not a lot of work copying and pasting a post provided by a company for a quick buck. Influencers are hubs for people that share similar interests, making them the perfect marketing opportunity.

How to effectively market products using influencers?

The more niche your product is the easier it is to find an influencer to target an intended audience. For example, a company specializing in a new portable phone case can use influencers in both the technology segment and influencers who are always on the go. In essence, it is the ultimate word-of-mouth marketing. The consumer feels a connection with the influencer almost as if they know them personally. According to a Nielsen study, 83% of consumers trust influencers over a branded advertisement. If an influencer raves about a product, their followers who share similar taste will also go out and purchase the product. A simple 5-second plug about “never leaving the house without my Product X phone case” would likely reach a more direct audience than a costly commercial. Influencer marketing tends to already be international marketing. Influencers have followers from all over the world. Even though the influencer may be located in the states, they potentially could have a global reach. Another option is identifying the top influencers in other countries. It’s a lot easier for an American company to advertise via influencers from other countries. They can even do it remotely!

As the number of social media users continues to increase, companies have an opportunity to gain exposure to untouched markets. Most social media platforms have analytics that will give a company in-depth information about an influencer's following. This makes it more transparent for companies to identify a potential influencer to partner with. Influencer marketing will play a big part in the future of international marketing; so what is your company waiting for, hire an influencer today and watch your next product take off!

Categories
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.