The role of marketing communications

Presenting and exchanging information with various stakeholders, both individuals and organisations, to achieve specific results

Refers to the ‘communication mix’ or ‘promotional mix’o Public relationso Advertisingo Personal sellingo Direct Marketingo Sales promotiono Corporate image (not always included)

Internal marketing – how well communicated to the staff around the world are the missions, values, objectives, priorities and procedures

External marketing – how appropriate is the range of services, pricing structure, promotional effort, and distribution channels to the different consumer groups around the world

Interactive marketing – How effectively – and appropriately – do staff around world deal with each of the customer stakeholder groups

Interactive marketing

Essential for staff around the world to deliver consistent service Staff are trained how to communicate with stakeholders in a consistent way, take

appropriate decisions that fit with the strategy and deliver a standardised service, so that the reputation of the organisation is enhanced

Internal marketing

Key task is to ensure that all staff in its business units around the world are aware of the strategies, tactics, priorities and procedures to achieve the firms mission and objectives

Closer collaborations with supply chain and distribution channel members, worth with joint venture and strategic alliance partners and participate in marketing networks

Staff in remote locations often overlooked or receive messages that become unclear as they cross cultural and language boundaries

External marketing

Traditional role concerned with providing a mechanism by which features and benefits of product and service can be promoted as cost effectively as possible to existing and potential customers

International marketing communications however, have now become much more important with the marketing mix and the purposes for which marketing communications might be used externally in international markets are now more diverse

Need to communicate with a more diverse range of stakeholders, including supply chain partners, industry regulators, pressure groups and the community

Communicating the corporate identity to international stakeholders

Communicating their core values and standards to their internal and external stakeholders has become essential in order to demonstrate their responsibility to shareholders, trustworthiness to customers and care and concern for the local community, environment and local employees.

Corporate identity of the firm should be deeper and more pervasive and reflected in a clear distinctive message supported by the appropriate and proactive public relations activity

Using communications to build relationships

Customers feel that there is less risk of dissatisfaction in switching to alternative products and services – so becoming less loyal to any one particular brand

High costs of winning new customers- lower costs to retain current customers Relationship marketing has taken on greater significance with e-commerce where

communications, promotion and delivery of services have been integrated with CRM systems to enable firms to communicate in a much more intelligent, efficient and effective way by basing their messages on a better understanding of what they might wish to hear

Firm are able to be more sensitive to different cultures and environmental contexts to develop better relationships with their customers and other influential stakeholders.

Fundamental challenges for international marketing communications

International marketing communication have the fundamental purpose of ensuring that the intended messages (those which are part of the firm’s international marketing strategy) are conveyed accurately between the sender and the receiver, and that the impact of unintentional messages (those which are likely to have an adverse effect on the firm’s market performance and reputation) are kept to a minimum.

Communications process should be two way Mistakes in the use of language Lack of sensitivity to different cultures among international communicators Besides the highly visible failures (e.g. mistranslations etc.) which make firms appear to be

incompetent and insensitive there are many examples of wasted effort and resources which are not so widely publicised. There are a number of reasons for international marketing communications failure including:

o Inconsistency in the messages conveyed to customers by staff at different levels and from different countries and cultures

o Different styles of presentation of corporate identity, brand and product image from different departments and country business units which can leave customers confused

o A lack of coordination of messages, such as press releases, advertising campaigns and changes in product specification or pricing across the various country markets

o Failure to appreciate the differences in the fields of perception (the way the message is understood) of the sender and receiver. The field of perception tends to be effected significantly by the self-reference criteria of both parties. This is, perhaps where the greatest problems arise because, as we have already discussed, avoiding this requires knowledge of different market environments, cultural empathy and the willingness to adapt the communications programmes and processes to local requirements

o Counterfeiting or other infringements of patents or copyright (e.g. Apple in China) take place. Not only does the firm lose revenue, but it may also suffer damage to its image if consumers believe the low-quality goods supplied by the counterfeiter are genuine. Even if the customer knows the product is counterfeit the brand name might still be subconsciously associated with a poorly performing product

o Parallel importing, communicates contradictory messages that do not reflect the image of the brand and thus confuse customers. This can be problematic if the parallel importer seriously undercuts the prices charged by the official channel, leading customers to feel they have been ‘ripped off’ e.g. Levi’s

o Competitors, governments or pressure groups attack the standards and values of the MNE by alleging, fairly or unfairly, bad business practice. Despite their huge resources, some of the largest firms are not very effective in responding to

allegations from relatively less powerful stakeholders. Companies such as Shell, Exxon, and McDonald’s have suffered following criticism of their lack of concern for the environment. E.g. McD stories

International marketing communications, standardisation and adaption

For use in their corporate identity and global advertising campaigns a strict standardisation policy may be taken

Companies must demonstrate cultural sensitivity and empathy with a wide range of international customers

Standardisation

Stems from the organisation’s desire to improve efficiency Cost saving activity in marketing communications includes benefits from economies of scale Customers believe that they gain additional benefit and value from a consistent and widely

recognised brand image that reflects their own self-image e.g. Ferrari, Addidas etc Consistency in corporate identity and branding, reinforces awareness in stakeholders’ minds

and provides the familiarity with the company which leads to a feeling of confidence, trust and loyalty e.g. Rexona or Axe – Sure and Lynx

At an operational level, advertising standardisation is possible wheno Visual messages form the main content of the advertisemento Well-known international film stars, popular celebrities and sports personalities are

featuredo Music is an important part of communicationo Well-known symbols and trademarks are featured. For example, the Grand Canyon

in the US can be used to symbolise certain types of outdoor American values Advertisements do not travel well to other countries

o When the use of spoken and written language forms an important part of the communication

o If humour is used- humour is often very specific to certain cultureso If personalities are used who are well-known in one country but are not known

internationally – e.g. David Beckham & Armanio If campaigns are used that rely on specific knowledge of previous advertising i.e.

reminder advertising

Adaption

Cultural differences that must be managed when communicating with customers in different countries e.g. Chinese prefer communications which take a collectivist approach, which Americans prefer an individualistic approach

Advertisers believe that advertising is most effective when it is relative to the target audience

Companies may need to change their brand name due to different meanings in the host language

o Classic example of the Chevrolet’s Nova – meaning no-go in Spanisho Fern used instead of Anchor in Malaysia because Anchor was a local beer

Different symbols or other folklore – e.g. Pampers going into the Hong Kong market and did not change the advertising. A baby arrives by stork, but later it was found that this was not understood by local people as their folklore tells that babies arrive to deserving parents by peaches that float down a river

Colours meaning different things- e.g. colour used light blue in South East Asia, Pepsi lost market share to cola because light blue is associated with death and mourning

Firms use a variety of ways of becoming more sensitive to cultural differences – e.g. Unilever has set up innovation centres in Asia in order to bring together research, production and marketing staff to speed up development of international brands which have local appeal.

The integration of communicationsStakeholders receive messages both intended and unintended, from every part of the organisation’s activities. An organisation communicates in eight ways

Actions- what it does Behaviour, how things are done, for example, how the telephone is answered Face-to-face by management: through talks, visits and meetings it shows what the

management thinks is important Signals- from the organisations actions, facilities and objects, including executive bonuses,

dress, buildings Product and services, and particularly their quality Intended communications, such as advertising which is not always received as the

organisation expects Word of mouth and word of web (including email) Comment by other organisations, such as pressure groups, competitors and the media

As the number of communications have increased dramatically, and customers have become more critical and sceptical, the importance of integrated marketing communications has been emphasised in order to avoid conflicting messages and instead communicate consistent and mutually supporting messages

Messages are now more personalised, customer-oriented and technology driven approaches.

Kotler says that ‘companies need to orchestrate a consistent set of impressions from its personnel, facilities and actions that deliver the company’s brand meaning and promise to its various audiences’

The benefits of integration

Given the fact that individual messages on their own have little overall impact on customers it follows that the effort of communications will be significantly greater if the many messages are consistent, uniform and mutually supporting in the way that builds the image of the brand, product and service and reinforce the reputation, standards, and values of the organisation around the world.

It is easier to justify the cost and control communications activities if they are integrated so that the cumulative effect rather than individual effect is assessed. Measurement of individual actions is difficult, given the ‘noise’ in the environment, and so it is more sensible to measure the effects of combined actions.

Integration with the global strategy

Although usually considered to be a part of the marketing mix, in many organisations, communications takes on a much more important role. It is essential in explaining the organisation’s corporate, business unit and marketing mix strategies to stakeholders, including shareholders. Global integration is needed so that the consistency of internal and external communications across borders is maintained.

Business unit integration

At business unit level, managers in charge of communications must work closely with colleagues responsible for development, operations, key account management, sales and customer service centre management to develop a highly integrated global approach that offers a seamless service to customers.

Marketing mix integration

Customers continually receive communications from the organisation that are the result of marketing mix actions. Every element of the marketing mix communicates with customers.

It is important to remember that non-verbal communication in many markets has a greater impact than verbal communications or written words, especially given the amount of time (milliseconds) that a customer concentrates on one communication. For example, the colours and styles used in creative packaging or a signage work communicate non-verbally with the customers, reinforcing the images and customer perceptions, but this differs between cultures. Customers can pick up small errors in colour matching and design, so discipline in the use of the corporate identity is essential. In different cultures, the significance of colours, symbols and numbers is so great that they alone could deter customers from buying a product.

Coordination and planning on the international marketing communications strategy

To achieve its objectives, the communications strategy will almost certainly include a variety of promotional tools. The key to success is integrating the various promotion elements in a cost-efficient way and adding value through choosing the communications methods that will have the most impact on the customers. The actual mix chosen will depend upon a number of issues surrounding the context of the purchasing situation, including:

The market area and industry sector Whether it is consumer, institutional or business-to-business marketing The customer segment to be targeted The participants in the purchasing process, their requirements and expectations and the

best methods to reach and influence them The country or region, the culture, the communications infrastructure and the preferred

methods of communicating The resources made available by the organisation and the implications for the level of

involvement and control it wishes to exert over the communications process

Communications tools

Personal selling and word of mouth

For many companies the first proactive communication tool to promote exports Push strategy (persuading agents, distributors or retailers to stock the product) Expensive Two-way information flows (negotiation) More culture-bound than media advertising Restrictions on media availability may severely limit media advertising- good alternative Recruitment selection can be difficult Often there is legislation forcing greater hiring of locals In countries where labour costs are very low, personal selling is used to a greater extent than

in higher cost countries High labour cost countries- personal selling of low unit cost products is used rarely, except

for illegal trading (e.g. drugs) Personal selling requires

o Market knowledgeo Listeningo Questioning skills

Likely that local people will be more effective than home-based representatives in understanding the subtleties of the negotiation process as they apply within the local business culture – they will have fluent language skills and an intimate knowledge of the culture of the country

May still prefer to use someone from the home country for highly technical products as their technical knowledge may be key to closing a deal

Alternative approach is to employ expatriates – in order to bridge the culture and company standards gap. However, there are also issues with this, and the expat may react in one of three ways

o Adjustment is made to the expatriate culture onlyo Completely embraces the host culture and minimises contact with the expatriate

community – and the firm tooo Ideally, the expat adjusts to both local culture and the expat culture.

Relevant training should be provided

Advantages

Better communication Development of managerial talent

Disadvantages

Cross cultural training

Motivation Compensation Family problems Repatriation

Exhibitions, trade fairs and experiential marketing

Effective way of meeting many existing and potential customers from different countries – establishing relationships with agents and dealers with the goal to increase international sales

Provides an opportunity to see what the competition is doing Cost is very high – cost of stand, space rental, sales staff time and travelling expenses Must select the most appropriate fairs to ensure the money is well spent Important to prepare sales literature and selection of suitable personnel for the stand,

bearing in mind the need for cultural and language empathy Must consider the following

o Which are the priority products?o Does the market have high priority?o Has the potential for the product in this market been appraised?o Does the company’s product/service meet market standards?o Will the product be available in sufficient quantitieso Has the marketing strategy been decided and the budget established?o Is the trade fair suitable? o Do exhibiting costs fit the budget?o Is suitable stand space and a site space available?o Manpower requirements to be established

Experienced staff should be involved in this activity Price list with weights and measurements for freight calculations Sampling and gifts important as they give customer chance to try product and see quality Be careful that gifts are not seen as bribery – check how culture deals with this. Agent should undertake task of translation and local printing May be more economical to design multi-lingual leaflet so that company does not have to

print many Essential to publicise the attendance at the event to encourage potential customers to visit

and also ensure all leads are followed up Shimp (2006) explains that the real cost of exhibitions can be two or three times higher than

the cost of the event itself Can provide experiential marketing, a rapidly growing communications approach also called

customer experience marketing in which customers obtain an engaging, entertaining interactive experience.

o E.g. CES tech convention – most companies provide products to be tried out

Trade missions

Organised visits to a country or region by a group of senior business managers from a number of firms

Subsidised by national or local government Discussions with potential customers are arranged in advance in the host country Usually associated with exporting, and may be used to carry out introductory talks with

prospective clients to negotiate a contract. Preparation work before the visit is essential to ensure that meetings are arranged with

appropriate customers where there is a genuine possibility of business being generated Local embassy staff will usually also provide support Discussions with host government, civil servants, and politicians about how trade between

the two countries can be developed

Advertising

Online and offline Offline advertising has disadvantages because it is a one-way method of communication and

in international marketing, for example, it can be difficult to control the reach of TV (where the customers are exposed to the messages)

Objective is to obtain max exposure of the product or brand to the largest target audience Business-to-business advertising needs to be precisely targeted- as size of market is smaller Harmonisation of consumer demands and benefits of standardised products and services to

firms, there is a strong move to pan-regional advertising campaigns. Consumers increasingly share common values and characteristics but there are differences: for example, consumers in developing markets are still developing their habits as consumers.

Availability and usefulness off advertising depends on country. Must obtain data about media effectiveness in country to reach largest audience.

o E.g. Low literacy rates = advertising should not use print advertisements with text Increasingly fragmented nature of the market and the national press and television Online-offline - TV online etc Mass marketing is still valuable in ermerging markets and to help organisations create a

global brand Examples of global advertising

o Hyundaio HTCo Coca-Colao Pepsi

Television advertising

Cable and satelliteo More programmes- meaning that there is greater capacity for advertising, but there

is also greater competition for prime spots and also higher costs. Best example being the Superbowl in America

o Minority languages – perhaps can more specifically target these markets Online and offline communications can be integrated Advertisers adopting a different more inclusive approach win over customers due to

customers becoming more sceptical of advertising

Press advertising

Media availability and effectiveness particularly important in deciding the nature of campaigns as they vary from country to country

Distribution difficulties might also be an issueo Small countries easier to distribute o More difficult for countries like Russia for example, as well as strict restrictions on

press publications Readers moving online for news and magazine articles Fragmentation of readership means that national campaigns are more difficult to coordinate Trade press – can be a very significant medium Trade press can be extremely cost efficient as numbers of readers are small, but very

specialised, so target market likely to be reached

The use of agencies and consultancies

Most companies use agencies and/or consultancies Reasons for using

o Financial considerationso Specialist knowledgeo Creative inputo External perspective

Financialo Advertising agents that are recognised by the media are eligible for a commission

based on booked advertising space. The agency can, therefore, perform the advertising services of creation, media planning and booking more economically than the client

Specialist knowledgeo By concentrated on one particular area, agencies and consultancies can become

experts in specialised techniques, for example international database marketing or training sales people. Client companies might have an infrequent need for these services so find it more cost-effective to subcontract the work

Creative inputo Creativity is very important in marketing communications. The organisation culture

of client companies is unlikely to encourage true creativity in external communications. The challenge of new and different projects for different clients contributes to the creativity of agencies

External perspectiveo The external view of agencies reduces some of the myopia of the client company.

This might be particularly valuable at times of major transition, for example in moving from international marketing towards global marketing.

Dilemma for global marketers is whether to select one central agency or many local agencies in their target countries – both which have advantages and disadvantages

Sales promotions

Extra incentive for the purchaser at the point of sale Customers perception of relative value of the alternative promotions depends to a create

extent on their cultural values and differences, which lead to certain types of sales promotion being very successful in one country but failing in another

Legal restrictions may prevent the firm from standardising promotions Limitations on amount of cash discounts and special sales promotions in some countries in

Europe

Direct marketing

Direct mail Telephone selling Email marketing

Communicating with the wider range of stakeholders

Host country will not buy from a foreign firm that is unknown, or is perceived to be exploiting local workers, bribing government officials, showing little regard to environmental protection issues, offering poor or variable product quality or is likely to pull out from the country at any moment and thus be unable to fulfil its guarantees and obligations

Foreign firms should build increased loyalty among its customers by providing perceived better quality and value for money. To be a more reliable supplier, more caring about the local community, and in some cases, through association, to be respected by world personalities

Firms need to build their reputation with all their influential stakeholders, pressure groups and the community in general as well as customers. They do this in a number of ways

o Corporate identityo Sponsorshipo Public relations and lobbying

Corporate identity

Concerned with consistently communicating, not just what business the firm is in and what image it wishes to project in the market, but also how it does its business.

Must reflect standards and values it aims to uphold Corporate philanthropy is a key factor Consistency in the way the company name and logo is presented and applied to a vast range

of physical outputs and assets of the company including signs, staff uniforms, letterheads, visiting cards, gifts, annual reports, packaging specification and promotional literature

Many challenges in applying them consistently in all countries where the firm operates, especially where it develops alliances with partners who might also wish to maintain their corporate identity in joint communications

May pose more difficulties in the firm’s attempts to achieve consistency and a favourable impact throughout the world because of the different cultural values of its staff and stakeholder in different countrie

Sponsorship and celebrity endorsement

Sponsor provides finance, resources or other support for an event, activity, firm, person, product or service

Sponsor would expect to gain some advantage e.g. exposure of its brand, logo or advertising message

Good opportunities foro Brand exposure and publicityo Opportunities to entertain and reward customers and employeeso Association between brands and events, with the events often reinforcing the brand

positioning o Improving community relations by supporting community based projectso Creating opportunity to promote brands at the event, through providing free

products or gifts

Public relations

Communicating news stories about the firm, its people, standards and values – especially its attitude to CSR

Purposes of PRo Helping to foster the prestige and reputation of the firm through its public imageo Raising awareness and creating interest in the firm’s productso Dealing with social and environmental issues and opportunitieso Improving goodwill with customers through presenting useful information and

dealing effectively with complaintso Promoting the sense of identification of employees with the firm through

newsletters, social activities and recognitiono Discovering and eliminating rumours and other sources of misunderstanding and

misconceptionso Influencing the opinions of public officials and politicians, especially in explaining the

responsible operation of the business and the importance of its activities to the community

o Dealing promptly, accurately and effectively with unfavourable negative publicity, especially where it is perceived to be a crisis which might damage the firm’s reputation

o Attracting and keeping good employees Public relations is concerned with a wide variety of activities in order to deliver these

objectiveso Dealing with press relationso Arranging facility visitso Publishing house journals and newsletterso Preparing videos, audio-visual presentations, printed reports and publications

describing the firm’s activitieso Training courseso Arranging community projectso Lobbying governments

Seems neutral coming from the media, whereas the advertisers positive statements are expected to be persuasive in nature

Relationship marketing

Traditional marketing approach – individual transactions At the core of relationship marketing is the idea that rather than simply trying to add

customer service onto a predetermined product offer, based on a rigid marketing mix, the firm should provide customer satisfaction by using the marketing mix flexibility to meet the customer’s evolving needs

Particularly important in B2Bmarketing – e.g. Shell & Baker Hughes or BA, Ryan Air, Easy Jet & Boeing and Airbus

Both supplier and customer have something to gain and RM is concerned with developing and maintaining mutually advantageous relationships

Horovitz (2000) 4 Cs instead of 4Pso Customer needs and wantso Costso Convenience o Communication

Objectives of relationship marketing are too Maintain and build existing customers by offering more tailored and cost-effective

business solutionso Use existing relationships to obtain referral to business units and other supply chain

members that are perhaps in different parts of the world and not currently customers

o Increase the revenue from customers by offering solutions that are a combination of products and services

o Reduce the operational and communications cost of servicing the customers, including the work prior to a trading relationship

Must be built with those that might influence final purchase decision

Database development

Starting point is to build an IT system that will integrate the RM activity. Central to the system is a database that will identify those customers with which it is worthwhile developing a relationship

Identifying trends in behaviour and attitudes from data provides a basis for targeting prospective customers cost-effectively, developing cooperative relationships with other companies and better understanding the patterns of customer purchasing behaviour

Summary

To be effective in global markets external international marketing communications are driven by the need to have a uniform corporate identity, clearly differentiated product and service offers supported by consistent promotion and strategies in place to build long-term customer relationships

Firms also need to focus on internal and interactive communications and ensure that their staff and partners’ staff in remote locations deliver consistent and integrated international marketing communications

There are benefits to the firm standardising the promotion processes and programmes to benefit from economies of scale and the learning effect, wherever possible, but communications are extremely sensitive to local culture and conditions and, without attention to detail, they can be the source of problems worldwide for firms

The communication tools must be used appropriately to suit the context of the markets being served, different customer needs and the firm’s objectives. Media availability, cultural and legislation differences and the nature of the products and services being marketed will influence the communications strategy decisions and choice of tools

Customer perceptions can be damaged by poor communications management within the firm and by external factors over which the organisation may have no control. The international firm must concentrate on communicating consistency in its image, standards and values to a diverse range of stakeholders as well as making its direct appeal to existing and potential customers. It must also integrate the traditional communications with online communications to further develop interactive, one-to-one customer relationships

Because of the high cost of winning and losing customers, firms, particularly in the business-to-business market, must build relationships to retain their most valuable customers in the long term. They must also measure the impact of their marketing communication investment as far as possible to ensure value for money