1. Local Advertising
1.1 Types of Local Advertising
1.2 Objectives of Local Advertising
1.3 Planning the Advertising Effort
1.4 Creating the Local Advertising
1.5 Seeking Creating Assistance
Public Relations, CorporateAdvertising, and NoncommercialAdvertising
1. The Role of Public Relations
2. Corporate Advertising
2.1 Public Relations Advertising
2.2 Corporate/Institutional Advertising
2.3 Corporate Identity Advertising
2.4 Recruitment Advertising
3. Noncommercial Advertising
3.1 Examples of NoncommercialAdvertising
3.2 Types of Noncommercial Advertising
3.3 Advertising Council
1. Growth and Status of InternationalAdvertising
1.1 Managing International Advertising
1.2 Creative Strategies inInternational AdvertisingBibliography
Advertisingcan be used for a variety of special purposes. Local businesses advertisewithin a particular geographic area rather than nationwide, corporationssometimes advertise to enhance their reputations rather than to sell products,and international businesses advertise around the world. This course paper is athorough coverage of these special types of advertising. The prevalence ofadvertising underscores its many advantages. Of the various forms of promotion,it is the best for reaching mass audiences quickly at a low person cost. It isalso the form of promotion over which the organizations has the greatestcontrol. In an advertisement, you can say what ever you want, as long as youstay within the boundaries of the law and conform to the moral and ethicalstandards of the advertising medium and trade associations. You can promotegoods, services, and ideas, using a full range of creative and generating salesleads. In addition,it can rekindle interest in a productwhose sales have grown sluggish,as illustrated by the remarkablesuccess of Isuzu's memorable«liar» commercials. While salesof other Japanese cars and truckswere growing by only percent,Isuzu's sales jumped 21 ercentwithin a few months after «Joe suzu»started hawking the cars on TV with subtitles announcing that he was stretchingthe facts.
Theobject of our investigation is special types of advertising.
Theaim of investigation is to tell about special types of advertising.
Themain tasks of our course paper is to learn the special types of advertising.
Thetheoretical value of the investigation are different examples on differentfirms by the theoretical explanation.
Thepractical value of the investigation is to learn how different kinds of firmsdo their advertising. The novelty of investigation is to show what moderntechnologies of advertising the population has achied.
CHAPTER 1. «LOCAL ADVERTISING»
1. LOCAL ADVERTISING
As opposed to regionalor national advertising, refers to advertising by businesses within aparticular city or county to customers within the same geographic area. In1990, approximately 44 percent of all dollars spent on advertising were forlocal advertising.
Quite often, localadvertising is referred to as retail advertising because it is commonlyperformed by retail stores. However, retail advertising is not necessarilylocal — it can be regional or national as well, as the volume of commercialsrun by national retail firms such as sears and J.C.Penney. Moreover, manybusinesses not usually thought of as retail stores use local advertising — realestate brokers, banks, movie theaters, auto mechanics, and TV stations,restaurants, museums, and even funeral homes. Local businesses of all typesoften use public service or issue advertising.
Localadvertisers fit into three categories:
*Dealerships or local franchises or regional or national companies thatspecialize in one main product or product line ( such as Toyota, McDonalds, orH&R Block).
*Stores that sell a variety of branded merchandise, usually on a nonexclusivebasis ( such as department stores ).
*Specialty businesses and services ( such as music stores, shoe repairshops,florists, hair salons, travel agencies ).
Businessesin each of these categories have different advertising goes and approaches.Local advertising is very important because most sales are made or lostlocally. A national auto manufacturer may spend millions advertising new cars,but its nationwide network of local auto dealers spend just as much or more ona combined basis to bring customers into their showrooms to buy the cars. Infact, if the dealers don't make a strong effort on the locallevel, the effortof national advertisers may be wasted. So when it comes to consummating thesale, local advertising is where the actions is. The basic principles used by nationaladvertisers are also applicable to local advertising, but local advertisershave special problems that stem from the simple, practical realities ofmarketing in a local area.
Localand national advertisers differ in basic objectives and strategies, perceivedneeds of the marketplace, amount of money available to spend on advertising,greater emphasis by local advertisers, on newspaper advertising, use of priceas a buying inducement, and the use of specialized help in preparingadvertisements.
1.1 TYPES OF LOCAL ADVERTISING
Thetwo major types of local advertising are produce and institutional. As its nameimplies product advertising is designed to sell a specific product or serviceand to get immediate action institutional advertising, on the other hand,attempts to obtain favorable attention for the business as a whole not for aspecific product or service the store or business sells. The effects ofinstitutional advertising are intended to be long term rather than short rang.
1.2 OBJECTIVES OF LOCAL ADVERTISING
Theobjectives of local advertising differ from the objectives of nationaladvertising in both emphasis and time. National manufacturers tend to emphasizelong-term objectives of awareness, image, and credibility. On the local, retaillevel, the advertiser's needs tend to be more immediate, as shown in thechecklist of Local Advertising Objectives. The emphasis is on keeping the cashregister ringing — increasing traffic, turning over inventory, and bringing innew customers among other things. As a result on the local level, there areconstant promotions, sales and clearances, all designed to create immediateactivity. The trade-off, of course, is that the day after the promotions orsale the traffic may drop. So to increase traffic again, the merchant may plananother sale or another promotion. Then another and another. This can result ina cycle of sporadic bursts of activity followed by inactivity, sharp peaks andvalleys in sales, and the image of a business that should be visited only duringa sale. Long-term and short-term objectives work against each other when one issought at the expense of the other. Successful local advertisers must therefore think of long-term objectives first and then develop short-term goals tohelp achieve their long-term objectives. This usually increases the emphasis oninstitutional and regular price-line advertising, improves customer service,and reduces the reliance on sales and clearances for creating traffic.
1.3 PLANNING THE ADVERTISING EFFORT
Thekey to success in any advertising program, local or national, is adequateplanning. Planning is not a one-time occurrence, however, but a continuousprocess of research evaluation, decision, execution, and review. On the locallevel, more advertising dollars are wasted because of inadequate planning thanfor any other reason. The success of Rebio's was due to the fact that RalfRubio made planning a continuous, flexible process that allowed for change,improvement, new facts, and new ideas. Several steps are involved in planningthe local advertising effort: analyzing the local market and the competition,conducting adequate research, determining objectives and strategy, establishinga realistic budget, and planning media strategy. However the small advertiser willoften profit from a bottom-up planning approach. Rubio's success, for example,can be attributed to his starting with a tactic- the fish taco- and thenbuilding a complete strategy around it, from the bottom up.
1.4 CREATING THE LOCAL ADVERTISING
Oneof the most competitive businesses in any local market is the grocery business.Characterized by high overhead, low profit margins, heavy discounting, constantpromotion, and miser doses of advertising, food retailing is a difficult andhighly competitive business at best. The Tom Thumb Page grocery stores inDallas had an additional problem. They had elected to avoid price competitionwhenever possible and to compete instead on the basis of quality and service.This policy made it potentially difficult to attract new customers and createstore traffic, because grocery customers tend to be very price-oriented.
TheTom Thumb Chain had been doing " maintenance advertising " in routinefood-day newspaper sections for about four years. When they hired a new CharlesCullum explained their situation and their objectives. They asked the agency todevelop a campaign that would show that Tom Thumb was, in fact, verycompetitive in giving top value even though the prices might be slightlyhigher. Barbara Harwell and Chuck Beau, the agency's creative directors,responded by developing a local institutional compaign that made groceryadvertising history. They suggested opening the campaign with a televisionpromotion for Thanksgiving turkeys. They convinced the Cullums and TomHailstone, the Chain's president, that to present a truly quality image theywould have to create an absolutely outstanding commercial in terms ofproduction quality. Furthermore, to communicate that Tom Thumb's policies trulywarranted higher prices, they pervaded the clients to make a bold, riskystatement that would impress the viewing public. Hairston and the Cullumsagreed two weeks before Thanksgiving, the campaign began.
TheCommercial Opened with a tight close-up of a live turkey. As the off-cameraannouncer spoke, the camera pulled slowly back, and the turkey rested to thecopy with an occasional" gobble ". The announcer said: At Tom Thumbwe stand behind everything we sell… And that's a promise. It's always beenthat way. Even when we started, Mr. Cullum said, «We want our customers tobe happy with every thing they buy in this store. If a woman buys a turkey fromus and comes back the day after Thanksgiving with a bag of pones and says shedidn't like it we'll give her money back or give her another turkey.» Themoment he said that, the turkey reacted with a big " gobble " and ranoff-camera.
Thecommercial closed on the company lag with the announcer saying, «That'sthe way we do business at Tom Thumb… we stand behind everything we sell, andthat's a promise.» The company merchandised the campaign by printing theslogan " We stand behind everything we sell… and that's a promise".On grocery sacks, on red lapel buttons for employees, and on outdoorbillboards. The audio portions of the commercials were aired as radio spots.Most important employee-orientation meetings were held to explain the conceptsto the company's personal and to make absolutely sure that any customersreturning merchandise received a friendly, cordial smile from the employeehandling the transaction. The reaction to the campaign was astounding. First,it became the topic of local conversation. Then people began to wonder how manyturkeys' people began to talk about the campaign and showed the commercial intheir newscasts. Finally, the top disk jockey in Dallas sponsored a contestinviting listeners to guess how many turkeys would be returned to Tom Thumb.The day after Thanksgiving, the local TV film crews waited at the stores tocount and interview people carrying in bags of bones. One customer said shereturned a turkey and got her money back with no questions asked. Another saidshe was given her money immediately but that she then gave the money back. Shehad just wanted to test them to see whether they were telling the truth.
Thefinal score was 30.000 turkeys sold and only 18 returned — a fantasticmarketing, advertising, and publicity success. Since then, the store has beenreported in numerous grocery and advertising trade journals, and Tom Thumb Pagesuccessfully continued the " we stand behind everything we sell "advertising campaign theme.
This" talking turkey " example shows that creativity in developing an adcampaign is just as important at the local level as it is on the nationallevel, Local advertisers often fail to realize that their print and broadcastmessages the budgetary constraints of local businesses, creativity becomes evenmore important in grabbing the consumer's attention. The final section of thischapter addresses elements that go into creating local ads, and the kinds ofcreative assistance available to local advertisers.
1.5 SEEKING CREATIVE ASSISTANCE
Localbusinesses have a number of sources they can turn to for creative help,including advertising agencies, the local media, free-lancers and consultants,creative boutiques, syndicated art services, and wholesalers, manufacturers,and trade associations.
CHAPTER 2.«PUBLIC RELATIONS, CORPORATE ADVERTISING, AND NONCOMMERCIALADVERTISING»
1. THE ROLE OF PUBLIC RELATIONS
Publicrelations (PR) is a term that is widely misunderstood and misused to describeanything from selling to hosting, when in fact it is a very specificcommunications process. Every company, organization, association, andgovernment or says. They might be employees, customers, stockholders,competitors, suppliers, or Just the general population of consumers. Each ofthese groups may be referred to as one of the organization's publics. Theprocess of public relations manages the organization's relationships with thesepublics.
Assoon as word of the Valdez Spill got out, the PR staff at Exxon assumedresponsibility for handling the barrage of phone calls from the press and thepublic and for managing all company communications with the media.
Simultaneously,other company departments had to deal with numerous local, state, and federalgovernment agencies and with the community at large — not just in Valdez,Alaska, but anywhere in the world where someone was touched by the disaster. Inaddition, myriad other publics suddenly popped into the spotlight demandingspecial attention and care: Alaskan fishermen, both houses of congress, localpoliticians, the financial community, stockholder, employed, the local press,national networks, Exxon dealers, and environmental groups, for starters.
Companiesand organizations know they must consider the public impact of their actionsand decisions because of the powerful effect of public opinion. This isespecially true in time of crisis, emergency, or disaster. But it is just as truefor major policy decisions concerning changes in business management, pricingpolicies, labor negotiations, introduction of new products, or changes indistribution methods. Each of these decisions affects different groups indifferent ways. Conversely, effective administrators can use the power of thesegroups' opinions to bring about positive changes.
Inshort, the purpose of ever using labeled public relations is to influencepublic opinion toward building goodwill and a positive reputation for the organization.In one instance, the PR effort might be to rally public support; in another, toobtain public understanding or neutrality or in still another, simply torespond to inquiries. Well-executed public relations is a long-term activitythat molds good relationships between an organization and its publics. Putyourself in the position of Exxon's top public relations manager at the time ofthe Valdez accident. What do you suppose was the major thrust of the PR staff'sefforts in the days immediately following the discovery of the oil spill? Whatmight they have been called on to do?
Wewill discuss these and other questions in this chapter. But first it isimportant to understand the relationship between public relations andadvertising they are so closely related but so often misunderstood.
2. CORPORATE ADVERTISING
Asmentioned earlier, corporate advertising is basic tool of public relations. Itincludes public relations advertising, institutional advertising, corporateidentity advertising, and recruitment advertising. Their use depends on theparticular situation, the audience or public being addressed, and the messagethe firm needs to communicate.
2.1 PUBLIC RELATIONS ADVERTISING
Publicrelations advertising is often used when a company wishes to communicatedirectly with one of its important publics to express its feelings or enhanceits paint of view to that particular audience. The Claris ad in exhibit 18-7,for example, targets customers investors, and stock analysts. Public relationsads are typically used to improve the company's relations with labor,government, customers, or suppliers.
Whencompanies sponsor art events, programs on public television, or charitableactivities, they frequently place public relations ads in other media topromote the programs and their sponsorship. These ads are designed to enhancethe company's general community citizenship and to create public goodwill. Thead in Exhibit 18-8 promotes an art exhibit ant southwestern Bell's sponsorshiprole.
2.2 CORPORATE/INSTITUTIONAL ADVERTISING
Inrecent years the term corporate advertising has come to denote that broad areaof nonproduct advertising used specifically to enhance a company's image andincrease lagging awareness. The traditional term for this its institutionaladvertising.
Institutionalor corporate ad campaigns may serve a variety of purposes — to report thecompany's accomplishments, to position the company competitively in the market,to reflect a change in corporate personality, to shore up stock prices, toimprove employee morale, or to avoid a communications problem with agents,suppliers, dealers, or customers.
Companiesand even professional advertising people have historically questioned, orsimply misunderstood, the effectiveness of corporate advertising. Retailers, inparticular, have clung to the idea that institutional advertising may be prettyor nice, but that it " doesn't make the cash register ring ".However, a series of marketing research studies sponsored by Time magazine andconducted by the Jankelovich, Kelly & White research firm offered dramaticevidence to the contrary.
Inthe first of these studies, 700 middle- and upper-management executives wereinterviewed in the top 25 U.S. markets. The researchers evaluated fivecompanies that were currently doing corporate advertising and five that werenot. They found that the companies using corporate advertising registeredsignificantly better awareness, familiarity, and overall impression thancompanies using only product advertising. In fact, the five corporateadvertisers in the study drew higher ratings in every one of 16 characteristicsmeasured, including being known for quality products, having competentmanagement, and paying higher dividends. Perhaps the most interesting aspect ofthe research was the fact that the five companies with no corporate advertisingspent far more for total advertising than did the firms engaged in corporateadvertising.
DavidOgilvy, the founder and creative head of Ogilvy & Mather, has been anoutspoken advocate of corporate advertising. However, he has been appalled bymost corporate advertising, characterizing it as filled with " pomposity", " Vague generalizations," and " fatuousplatitudes". Corporate advertising has also been criticized for obliviousto the needs of the audience.
Respondingto such criticisms and to other forces in the marketplace, corporations havemade policies and campaigns. Expenditures for this type over the last decade.The primary medium used for corporate advertising is consumer (primarilybusiness) magazines, followed by network television.
Achange in message strategy has also accompanied this increase in corporate adspending. In the past, most corporate ads were designed primarily to creategoodwill for the company. Today with many corporations diversifying andcompetition from for ling advertisers increasing, these same firms find theircorporate ads must do much more. Their ads must accomplish specific objectives-develop awareness of the company and its activities, attract quality employees,tie a diverse product line together, and take a stand on important publicissues.
Anothercategory of corporate advertising is called advocacy advertising. Corporationsuse it to communicate their views on issues that affect tailors its stand toprotect its position in the marketplace.
Corporateadvertising is also increasingly being used to set the company up for futuresales. Although this is traditionally the realm of product advertising, manyadvertisers have instituted " umbrella " campaigns thatsimultaneously communicate message about the products and the company. This hasbeen termed market prep corporate advertising a GTE umbrella campaign, forexample, emphasized the company's products and services in a way that pointedup its overall technological sophistication.
Ofcourse, no amount of image advertising can accomplish desired goals if theimage does not match the corporation. As noted image consultant Clive Chajet putit, " You can't get away with a dies enounce between the image and thereality — at least not for long ".If, for example, a sophisticatedhigh-tech corporation like IBM tried to project a homey, small-town familyimage. It would lose credibility very quickly.
2.3 CORPORATE IDENTITY ADVERTISING
Companiestake pride in their logos and corporate signatures in fact, the graphic designsthat identity corporate names and products are considered valuable assets ofthe company, and great effort is expended to protect their individuality andownership. The corporate logo may even dominate advertisement. What does acompany do, though, when it decides to change its name, logos, trademarks, orcorporate signatures, as when it merges with another company? How does itcommunicate that change to the market it serves and to other influentialpublics? This is the job of corporate identity advertising.
Whensoftware publisher Productivity Products International changed its name toStepstone Inc., it faced an interesting dilemma. It needed to advertise thechange. But in Europe, a key market for the firm, a corporate name changeimplies that the business has gone bankrupt and is starting over with a newidentity. So, rather than announcing its new name in the print media, stepsonused a direct-mail campaign. It mailed an announcement of its name change tocustomers, prospects, investors, and the press. The campaign was a success:within days of the mailing, almost 70 customers and prospects called stepstoneto find out more about the company and its products. More familiar corporatename changes from the recent past include the switch from America of WesternBank corporation to First Intestate Bankcorp; the change of Consolidated Foodsto replace the premerger identities of Boroughs and Sperry.
2.4 RECRUITMENT ADVERTISING
Whenthe prime objective of corporate advertising is to attract employmentapplications, companies use recruitment advertising such as the Chiat/Da ad inExhibit 18-10. Recruitment advertising is most frequently found in theclassified sections of daily newspapers and is typically the responsibility ofthe personnel department rather than the advertising department. Recruitmentadvertising has become such a large field, though, that many advertisingagencies now have recruitment specialists on their staffs. In fact, someagencies specialize completely in recruitment advertising, and their clientsare corporate personnel managers rather than advertising department managersThese agencies create, write, and place classified advertisements in newspapers around the country and prepare recruitment display ads for specializedtrade publications. So far in this chapter, we have discussed only theadvertising of commercial organizations. But nonprofit organizations alsoadvertise. The government charities, trade associations, and religious groups,for example, use the same kinds of creative and media strategies as theircounterparts in the for-profit sector to convey messages to the public. Butunlike commercial advertisers whose goal is to create awareness, image, orbrand loyalty on the pan o' consumers, noncommercial organizations useadvertising to affect consume! opinions, perceptions, or behavior—with noprofit motive. While commercial advertising is used to stimulate sales.
3. NONCOMMERCIAL ADVERTISING
Usedto stimulate donations, to persuade people to vote one way or another or tobring attention to social causes.
Ifa specific commercial objective for a new shampoo is to change people'; buyinghabits, the analogous noncommercial objective for an energy conservationprogram might be to change people's activity habits, such as turning offthe lights. The latter is an example of demarcating, which means theadvertiser is actually trying to get consumers to buy less of a product 01service. Exhibit 18-11 compares objectives of commercial and noncommercialadvertisers.
3.1 EXAMPLES OF NONCOMMERCIALADVERTISING
Oneexample of noncommercial advertising conducted on a large scale is the antidrugcampaign created by the Partnership for a Drug-Free America. In 1987, thiscoalition of more than 200 ad agencies, the media and many other companies inthe communications business launched an all-out attack on drug abuse. Thecoalition set its goal as the «fundamental reshaping of social attitudesabout illegal drug usage.» The $1.5 billion program entails theefforts of ad agencies across the country, each developing components of thecampaign at their own cost.
Theantidrug program includes hundreds of newspaper and magazine ads as well as 200different commercials and print ads. The space and time allotted for the ads,all donated by the media, are worth an estimated $310 million per year.24Similarly, most of the creative and production suppliers have donated theirservices.
Thewide variety of ads have been created to reach specific target groups. Some areaimed at cocaine users, some at marijuana smokers; some are aimed at parents,some at children. Most ads present hard-hitting messages about the dangers ofdrug abuse, depicting drug use as a sure route to the hospital or the cemetery.In a TV commercial targeted at teenaged marijuana smokers, for example, theAyer agency suggests that pot smokers are subjecting themselves to the risk ofphysical and mental health problems. Other commercials compare the brain ondrugs to an egg in frying pan or show dead rats that have succumbed to cocaineabuse. Print ads have also emphasized the dangers of cocaine abuse, including aseries of ads developed by DDB Needham Worldwide that enumerate cocaine'seffects. Exhibit 18-12 is from that series of ads. In addition, some ads speakto parents who use drugs («If parents stop, kids won't start»), towomen tempted to use cocaine («What to do if he hands you a line»),and to parents who have put off talking to their children about drugs («Ifeverybody says it can't happen to their kids, then whose kids is it happeningto?»).
Theeffort is being billed as the «largest and most ambitious private-sector,voluntary peacetime effort ever undertaken.» Believing that the UnitedStates cannot succeed as a drug culture and that advertising can«demoralize» drug use, the organization wants nothing less than adrug-free America.
Notall public service advertising is done on such a massive scale. We seeadvertisements daily for intangible humanitarian social causes (Red Cross),political ideas or issues (political candidates), philosophical or religiouspositions (Church of Latter Day Saints), or particular attitudes and viewpoints(labor unions). In most cases, these advertisements are created and placed bynonprofit organizations, and the product they advertise is their particularmission in life, be it politics, welfare, religion, conservation, health, art,happiness, or love.
Researchconducted by the Partnership for a Drug-Free America proves that noncommercialadvertising does change consumer attitudes. Specifically, the coalition's adshave changed attitudes about drug use. Thus, by providing information to thepublic on issues such as health, safety, education, and the environment,noncommercial advertising helps build a better society. Public serviceannouncements emphasizing the dangers of unsafe sex and drunk driving and thosestressing the virtues of recycling and continuing education demonstrate thatnoncommercial advertising can help to enhance the quality of life.
3.2 TYPES OF NONCOMMERCIAL ADVERTISING
Oneway to categorize the various types of noncommercial advertising is by theorganizations that use them. For instance, advertising is used by churches,schools, universities, charitable organizations, and many other nonbusinessinstitutions. We also see advertising by associations, such as laborgroups, professional organizations, and trade and civic associations. Inaddition, we witness millions of dollars' worth of advertising placed ^governmentorganizations: the U.S. Army, Navy, Marine, Corps, and Postal Service; theSocial Security Administration; the Internal Revenue Service; and various statechambers of commerce. In addition, in election years we are bombarded with allsorts of political advertising that qualifies as noncommercial. The AdvertisingCouncil Most of the national PSAs you see on television have been placed thereby the Advertising Council, a private, nonprofit organization that linksnoncommercial campaign sponsors with ad agencies. The sponsors pay forproduction costs, while the ad agencies donate their creative services.
3.3 ADVERTISING COUNCIL
TheAd Council's policy today is basically the same as when it began during WorldWar II: «Accept no subsidy from government and remain independent of it.Conduct campaigns of service to the nation at large, avoiding regional,sectarian, or special-interest drives of all kinds. Remain nonpanisan andnonpolitical. Conduct the Council on a voluntary basis. Accept no project thatdoes not lend itself to the advertising method. Accept no campaign with acommercial interest unless the public interest is obviously over riding.»
Amongfamiliar campaigns created by the Ad Council are those for the United NegroCollege Fund («A mind is a terrible thing to waste»); child abuseprevention («Help destroy a family tradition»); the United Way(«It works for all of us»); crime prevention («Take a bite outof crime»); and the U.S. Department of Transportation («Drinking anddriving can kill a friendship»). Exhibit 18-17 shows frames from an AdCouncil commercial that advocates a healthy diet. The Ad Council's twolongest-running campaigns are those for the American Red Cross and forest fireprevention. According to the Ad Council's research, the number of forest fireshas been cut in half over the life of the Smokey Bear campaign.29 The councilis currently playing a role in overseeing the Partnership for a Drug-FreeAmerica effort.
CHAPTER 3 «INTERNATIONALADVERTISING» 1. GROWTH AND STATUS OF INTERNATIONAL ADVERTISING
Inthis text, we have discussed marketing and advertising planning, advertisingcreativity, and the advertising media. We have also offered overall advertisingperspectives and focused on some special types of advertising, However, most ofthis discussion has centered on advertising as practiced in the United Statesand Canada. The question arises, therefore, as to how well such practiceapplies to advertising in the rest of the world. Companies advertising abroadface a variety of difficulties and opportunities, as we will see in thischapter.
Abit of history will help put the current explosion of international advertisinginto perspective. As U.S. companies entered world markets after World War II,consumption of U.S. products grew tremendously. By 1990, U.S. advertisingexpenditures accounted for $130 billion, or 47 percent of the world total.2However, in the last 15 years, expenditures by foreign advertisers increased evenmore rapidly than U.S. expenditures, thanks to improved economic conditions anda desire for expansion. As national economies have expanded and personalincomes have increased, the use of advertising has also increased.
Organizationsin every country of the world practice advertising in one form or another.Actual figures are not available, but recent estimates of worldwide advertisingexpenditures outside the United States exceed $145.6 billion per year, or 53percent of the worldwide total. The emphasis on advertising in individualcountries, though, depends on the country's level of development and itsnational attitude toward promotion. Generally, advertising expenditures arehigher in countries with higher personal income.
Today,advertising is used worldwide to sell ideas, policies, and attitudes as well asproducts. From Procter & Gamble in Cincinnati to Fiat in Turin, Italy,major marketers believe in international advertising, and they back theirconvictions with sizable advertising budgets. As Exhibit 19-2 shows, the top 10worldwide advertisers are based in many different countries.
Communistcountries, including China, once condemned advertising as an evil ofcapitalism. But now, with the Soviet Union's economy broadening to includeprivate enterprise, even the Soviets are starting to admit the benefits ofadvertising. Although decades of propaganda have conditioned Soviet consumersto distrust or ignore advertising, some Western advertisers are successfullygaining the attention of Soviet citizens by featuring instructional orentertaining fare in ads.4 Ad Lab 19-A (p. 674) discusses how Pepsihas successfully used advertising techniques within the Soviet market.
Certainly,as a communication form, international advertising contributes to theunification of the world. And one benefit is enhanced internationalunderstanding as advertisers introduce foreign products, values, and ideas intonew markets. As technology and ideologies evolve, international advertisingwill continue to flourish. As a creative director for Ogiivy & Mather inParis has said, «Noise n'avons pas mal de budgets,» which can beloosely translated as, «We're not hurting for business.»
1.1 MANAGING INTERNATIONAL
Imagineyou are the advertising manager of a U.S. company planning to market itsproducts abroad. You are aware that you may need to use a Advertising differentcreative strategy in the foreign market. You will be speaking to a new audiencewith a different value system, a different environment, and probably adifferent language. Your foreign customers will probably have differentpurchasing abilities, habits, and motivations than the average North American.The media that U.S. and Canadian advertisers generally use may be unavailableor ineffective in foreign markets. And the advertisements may need to bedifferent, too.
Youalso face another problem. How will you manage and produce the advertising?Will your in-house advertising department do it? Will your domestic advertisingagency do it? Or will you have to set up a foreign advertising department orhire a foreign advertising agency?
Toanswer these questions, we need to ask two more:
Howdoes your company structure its worldwide marketing operations? Within thatstructure, what are the most economical and effective means to conductadvertising activities?
1.2 CREATIVE STRATEGIES IN INTERNATIONALADVERTISING
Aswe have discussed throughout this text, advertisers set a creative strategybased on the mix of product concept, target audience, communications media, andadvertising message. The same holds true in international advertising, exceptthat advertiser often use different creative strategies in foreign markets thanthey would in the United States and Canada. There are several reasons for this:
Influencedby their own particular environment, foreign markets reflect their localeconomy, social system, political structure, and degree of technologicaladvancement. Therefore, the advertiser's target audiences may bedifferent, too.
Themedia the advertiser uses in domestic markets may not be available, or aseffective and economical, in foreign markets. Therefore, the company may needto alter its media strategy.
Foreignconsumers may not want to buy, or be able to buy, the same products (or productconcepts). They may have different motivations and buying habits. Therefore,the advertiser may need to alter the advertising message and possibly even theproduct concept.
Inthis section, we discuss these three Ms of advertising strategy—markets(audiences), media, and messages—and their relationship to internationaladvertising and the products marketed abroad.
1. Courtland L. Bovee, William F. Arens,«Contemporary Advertising», Boston, 1992.
2. David J. Rachman, Michael H. Rlescon,«Business Today», Boston, 1990.
3. Danielle Gibson, «Fundamental ofManagement», 1991.
4. «Encyclopedia», U.S. Pat.&T.M. Off. Marka Registrar, 1994.
5. «The English SpeakingWorld», Terra, 1995.
6. J. R. Evans, Barry Berman,«Marketing», New York, London, 1986.
7. I. Gibson, James L. Ivancevich, JohnM., «Managment», Boston, 1992.
8. Heinz Weihrich, Harold Koontz,«Management. A Global Perspective», New York, 1993.
9. Joseph E. Kolet, «Primer on.Wage & Hour Laws», Washington, 1970.
10. I. Kinner, Thomas C.,«Marketing -Managment», Boston, 1993.
11. KynpMaHosa H.C., «A Book ofBritain», JlbBie, 1978.
12. M. Registered, «WorldBook», England, 1994.
13. Stanley B. Block, Geoffrey A. Hirt,«Foundations of Financial Management», Homewood, Boston, 1992.
14. Stanley B. Block, «Foundationof Financial Management», 1981.
15. Thomas W. Knowles, «ManagementScience. Building and Using Models», Homewood, Illinois,1989.
Local advertising isreferred to as retail advertising because it is commonly performed by retailstores. However, retail advertising is not necessarily local — it can beregional or national as well, as the volume of commercials run by nationalretail firms such as sears and J.C.Penney. Moreover, many businesses notusually thought of as retail stores use local advertising — real estatebrokers, banks, movie theaters, auto mechanics, and TV stations, restaurants,museums, and even funeral homes. Local businesses of all types often use publicservice or issue advertising.
Businessesin each of these categories have different advertising goes and approaches.Local advertising is very important because most sales are made or lostlocally. A national auto manufacturer may spend millions advertising new cars,but its nationwide network of local auto dealers spend just as much or more ona combined basis to bring customers into their showrooms to buy the cars. Infact, if the dealers don't make a strong effort on the locallevel, the effortof national advertisers may be wasted. So when it comes to consummating thesale, local advertising is where the actions is. The basic principles used bynational advertisers are also applicable to local advertising, but localadvertisers have special problems that stem from the simple, practicalrealities of marketing in a local area.]
Publicrelations (PR) is a term that is widely misunderstood and misused to describeanything from selling to hosting, when in fact it is a very specificcommunications process. Every company, organization, association, andgovernment or says. They might be employees, customers, stockholders,competitors, suppliers, or Just the general population of consumers
Today,advertising is used worldwide to sell ideas, policies, and attitudes as well asproducts. From Procter & Gamble in Cincinnati to Fiat in Turin, Italy,major marketers believe in international advertising, and they back theirconvictions with sizable advertising budgets. As Exhibit 19-2 shows, the top 10worldwide advertisers are based in many different countries.