Factors Affecting Global Advertising Strategies
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CHAPTER 1 INTRODUCTION
This project will analyse how global advertising is affected by numerous problems and what global advertising strategies can be undertaken by multi-national companies. The project will start with an introduction to global advertising and related literature, theories which present the basis of the review. Then, the methods of collecting data and sources will take place such as how the data was gathered and evaluated. Furthermore, with analysis of all relevant outcomes, a conclusion will be drawn.
The reason why Kinetic, Turkey, was chosen as a case study is because it has been operating as an advertising company in different countries under different names. In addition, advertising is facing many issues in Turkey and this will provide a better insight to the problems of international advertising such as how the company copes with these issues.
In the global advertising phenomena, most businesses are keen to expand their brand of products into a market place that is becoming increasingly competitive, an unstoppable debate over the effectiveness of global advertising of products is still continuing. The idea began towards the late twentieth century and gained immense popularity among business communities as the sound of global recognition is a music to anyone's ears. It does have some challenges for business men all over the world. Among them is the issue of language, culture to name a few (Andros, 2000).
Global advertising involves distribution of a commercial message to target customers in other countries. Individuals differ from country to country which affects the way of how they recognize symbols, react to emotional appeals by considering the intensity of literacy and languages spoken. The structure of advertising function also shows difference. For instance, on the one hand, advertising decisions and budgets are centralized, and specific numbers of worldwide agencies are used by international organisations. On the other hand, organisations can decentralize the decisions and budgets and use the local advertising agencies. Therefore,global advertising is a communication process as a result of existing in different cultures that have different values, communication styles, and consumption patterns. Global advertising can be also seen as a business practice with advertisers and the advertising agencies which generate advertisements and buy media in other states Douglas& Craig, (1995).
It is difficult to communicate to a target audience in global markets as communication process passes through in numerous contexts and it varies because of language, literacy, and other cultural influences. Douglas & Craig, (2002) propose that there are three different stages are taken place in the process of the communication in global markets. First of all, the advertiser determines the appropriate message for the target audience. Then, to understand the message in different cultural contexts, it is encoded. Finally, the message is ready to be sent through the media channels to the customers who then interpret and respond to the message. However cultural factors can create barriers in these steps in the process of message and communication breaks may occur.
Efficiency of message is affected by the cultural context. The context where information is implanted is significant in the collectivist cultures such as Japan and China (Hall, (1976). Conversely, the information is embedded in verbal messages in low context cultures such as Western societies where they only expect whether information relating to the product or service is enough to meet with their expectations for content (De Mooij, 1998). However, image and mood appeals affect individuals easily in high context cultures where they depend on personal networks for information and content. To provide effective communication, it is important to understand these differences in communication techniques.
Global advertising can be also considered as business progress when a company introduce its product or services to customers in other countries. An appropriate message is determined by an advertising agency, which also build the media placement. While deciding global advertising strategy, awareness of developing an international or local ad campaign, or tailor communication to differences in home markets (Peebles and Ryans 1984). A standardized international campaign is often preferred to build a strong corporate or global image. Local campaigns are chosen if the purpose is to release a new product or build a new brand, or to differentiate the product or brand from competitors.
In 2006, Coca-Cola Company failed when the company launched the campaign of "Coke Side of Life", and it only provided simple messages with universal appeal. Coca-Cola used more regional approach rather than using a global marketing campaign (Summerfield, 2002). After this failure the organisation started to use its global resources to run a multi-media and multi-cultural strategy in worldwide markets. The firm has a better understanding of its local connections in which they market their products (Coca-Cola Company News Release, 2006).
Altstie and Grow (2006) believes that there are many advantages of standardization. One of the main advantages of standardization is local marketplace. As a brand takes a part in the process of decision-making especially supported by local professionals then it will help to increase the level of local acceptance easily. Having looked at the advantages of standardization, the other effect of it can be observed as off-target advertisements always provide support when there meets an increase related to cultural approach. Moreover, Altstie and Grow (2006) mention it is clear to say that culturally respectful and strategically bound advertising can often be highly successful. Another advantage of standardization is abating the rate of making cultural blunders.
"When choosing an advertising firm to take care of global promotional needs, companies should consider: the available budget; the promotional message; the complexity of the product or service; market size and location; distribution channels; life cycle and competition" (Proctor 2000, pp.227-228). It is vital to use an advertising agency which specializes in that type of campaign as the company operating global. McAllister (1997, p. 39) explains why it is more prudent to use global campaigns. There are many advantages of an international campaign such as building a strong and consistent global image for the company or its products and services across world markets and building awareness by using the same image in other countries. Moreover, utilization of a single campaign reduces the costs and productions in copy development. On the other hand, use of various regional campaigns may create repetition and lead to incoherent brand images and bewilderment in target audiences over the globe.
To start with, it is essential to identify the term of global advertising, which has been used for advertising universal brands, such as Marlboro cigarettes, Coca-Cola, Sony home electronics and Gucci accessories. For instance, Jones (2000) argues that if a brand is exactly the same in every way in the countries where it is represented, then this term can be called as global. However there are numerous brands are available; the numbers of truly brands are not that many. For example, Coca-Cola and Pepsi frequently do with some a few changes to contain local norms, tastes, and preferences, but Levi's jeans that are very much a global upon the country.
In the current economic scenario, many economists as well as media people are predicting that a competition among businesses might resemble the initial stages of E-Commerce when it was not well known. There are pieces of research that have addressed the question of price rivalry on the Internet. Examine price patterns with the competition and their pros and cons for the customer segment, where do they excel and where do they lack in traditional bricks and mortar retail settings (Frasier, 2002)
According to Keegan and Green, 2008, United States was the country where advertising industry spent $250 billion whereas they spent half a billion dollars for the world in 2003. In addition to this information, in total over a trillion dollars was spent for various kinds of promotions. The existing literature shows that General Motors spent only %2 of its sales for advertising while Unilever spent %3.2. However, 2 percent of total sales of General Motors which was equal to 3.7 billion dollars were more than double of Unilever' expense. $1.6 billion spent for advertising by Unilever. As a whole, in 2003, nearly $100 billion was spent for advertising by the market leaders. However the following statistics shows that global advertising expenditures highly declined as a result of economic crisis.
According to Zenith forecasts of 2006, the credit crunch has a negative effect on consumers and organisations in North America and Western Europe from 4.4% to 3.8%, however there is a growth in the rest of the world from 10.9% to 11.1%.
TNS Media Intelligence states that U.S. total measured advertising spending dropped 14.3 percent vs. in the first six months of 2009 to $60.87 billion and advertising expenditures during the second quarter of 2009 which was less than last year. The only media increase was internet in the first half of 2009.
Zenith forecasts (2006) showed that the top companies such as Verizon Communication, Procter & Gamble, AT&T, Sprint Nextel, Johnson & Johnson, General Motors, General Electric, News Corp., Time Warner and Walt Disney in the first six months of 2009 spent combined total of $7,866.4 million, spending decreased by 3.5 percent compare to last year. As creating the multinational advertising campaigns, not only political and legal forces, but also economic factor needs to be taken into account.
Definition of Problem
With a better understanding of the adaptation of global advertisements to local environments, the factors which have influence on global advertisements and the strategies can be generated by global companies against to these barriers will be addressed.
Aims and Objectives
The project will analyse how global advertising is affected by language, culture, colours, numbers and images, religion, education, country image, political and legal forces, production and cost limitations, and global advertising strategies undertaken by multi-national companies. To come to the main point, one ad needs to apply to everyone and their understanding concurrently. The ultimate goal is the adaptation of a global advert which attracts customers' attention to the highest point to generate the purchase process.
In this study, the analysis of how effectively global advertising can be adopted by different and changing backgrounds in Turkey has been examined. Furthermore, how successfully advertising firms do research as well as market their product and services within other countries to expand globally will be taken into account.
Structure of Study The research consists of five different chapters:
Chapter 1 presents the background global advertising, and indicates aims, objectives and the structure of the study. This chapter also includes some relevant examples and judgments to the literature review.
Chapter 2 provides review of relevant literature describing the challenges of global advertising with theoretical concepts and various examples of many organisations from books and journal articles.
Chapter 3 contains the research and data collection methods in detail including both primary and secondary data as well as analysis of data and sampling methods. Besides, reasons of selected research methods and how they were used are explained.
Chapter 4 gives a critical evaluation of data gathered from interviews with relevant justification, discussions and judgements. The aims and objectives set in the introduction have been addressed.
Chapter 5 provides a summary of the main findings with conclusions and recommendations from both literature review and interview. Additionally, directions for the future study are indicated in this chapter.
CHAPTER 2 LITERATURE REVIEW
During the last decade, organisations have been launched internationally to expand the size of the business and survive in the competitive environment as a result of global competition and to gain global demand for their products.
"Globalisation has been defined as the homogenization of people's wants and demands around the globe thanks to easy access of different products" (Hammond, & Grosse, 2003, p. 288).
Organisations have expanded into different markets with the development of communication technology and the communication among countries has become easier for mass media via internet and satellite television broadcast. With high technology, managers can directly access the firms and solve any problem that might exist in other countries (Johansson, 2006). The usage of television increased during the entire world as governments discontinued attempting to prevent TV access from their population in many states; the images publicized in this medium have really introduced existing cultures around the globe such as the public in Japan, Argentina, and Canada.
Moreover, the Internet has driven the globalisation of products by removing the barriers which formerly preventing products from gaining more recognition around the world. The physical limitations separating countries are breached as a result of Internet. However it has extended the worldwide scope of products, the "global branding strategy should actually be a local plan for each component market, as to apply a standard approach worldwide without considering local preferences and cultural differences is doomed to failure" (Dennis & Harris 2002, p.142).
Global organisations need to consider such as the available budget, the promotional message, the complexity of the product or service, market size and location, distribution channels, life cycle and competition when selecting an agency to heed on global promotional needs (Proctor 2000, p.227-228). It is prudent to select the advertising company which specialized in that type of promotion when the organisation is operating globally McAllister (1997, p. 39).
Global advertising challenges with a difficult task. An appropriate communication needs to be for any local market as campaigns also must be organized and controlling of expenses must be provided across the world. As a result of varying media, there will be a change in the possible channels of advertising (Hammond, & Grosse, 2003).
For business expansion, corporations have to consider many factors. Among these factors, the top most are language, culture, education, politics as well as economic environment (William and Cummins, 2008). Corporations that have been successful in implementing their business have done a great deal of homework in this regard as we see on their websites which are available in many languages, they also analyze the appropriate market for their product and look at the political stability of that particular country in order to make sure that their business is conducted properly (Boris, 2001). This has specially been observed in telecom and computer sector where we can now see just how successfully that have implemented their strategies to cross all the above mentioned hurdles. The product must be within the reach of a common man and they must spend an appropriate amount on advertising as to get the masses interested. Hype must be created to grab even more attention and the price/performance ratio of the final product must be in equilibrium (James & Badger, 2004).
On the other hand they do adjust rather poorly in organizations that need to change. Compensations must only be based on performance and the size of job in hand that must be focused on more promotion and in future striving to get an even bigger job (Murphy et al., 2005). The above mentioned can only be extracted when the company management decides to make a great relationship with the workforce. They must make them feel so comfortable as if they are dealing not just with workers but their own family members. Just like we all work for the benefits of our very own families, similarly they must motivate employees to such an extent that they are able to handle virtually any challenge that lies in the way of their organization (Parker, 2002).
But in order to achieve this, they will have to give additional benefits and rewards coupled with bonuses to their employees at regular intervals. As discussed above a factor that unfortunately even today is under use of many organizations, is the seniority factor where they encourage their employees on the basis of seniority rather than performance. Organizations have already begun the transition from relatively simple spreadsheets to the IT based database technology as this process has advanced along with the technology (Vein & Heflin, 2008). They can also use their brand name if it is well known to consolidate the quality and customer satisfaction by increased funding on re-structuring the pricing policies as well as present some significant discounts and combine them with a proactive marketing campaign (Vein & Heflin, 2008).
Although in many countries global advertising can be considered homogenous or not, media tools provide an easy access to a part of the world. While social and cultural differences can pose problems, a simple image of the products can remain in individuals mind; they gradually begin to participate in the global market.
The aims of advertising in each country have to be identified by the advertisers. Global advertising management should begin with the evaluation of the position of advertising in each market and the accessibility of the other advertising media.
Similarities in Advertising
Harris & Attour (2003, p. 160) expounded that "International advertising standardisation refers to using a common approach (for example common advertising message) to promote the same product across national boundaries". The similarities in advertising can be justified by the following: consistent image and identity throughout the world, single coordination of the marketing mix, and cost-savings;
Consistent Positioning Worldwide
By having similar advertising, organisations are able to show their consistency and maintain their brand image worldwide. Doing so prevents confusion and distortion of the way frequent travellers perceive brands In other words, the company gain in consistency because it carries the same image everywhere.
Smirnoff launched its "pure thrill campaign" showing distorted images becoming clear when viewed through the Smirnoff bottle; however the specific scenes change from one country to another to appeal to consumers with different assumption about what is thrilling. (Kiefer & Carter, 2005, p. 105)
Writing instrument common theme stresses "Parker" and "Pen" as synonymous. Personalisation of the advertisement can be made at the local level but always with a common theme (Advertising Age, 1984, p. 74).
Levi's in the early 1980s opted for a pattern advertising strategy, "where the broad outlines of the campaign are given but the details not" (Chase & Bacot, 1981, p. 34).
Cost Savings Achieved Through Standardisation
The potential for economy of scale achieved through standardization is enormous. Many companies have made huge savings thanks to standardization. In fact, by having one company to design the international advertising strategy, companies not only have a tighter coordination amongst brands but also achieve huge savings. Many companies have benefited from the cost savings potential of uniform advertising campaigns.
Coca Cola saved $90 million over 20 years by using McCann-Erickson to produce its worldwide commercials (De Mooij, 1997, p. 15).
Challenges in International Advertising
It is true that advertising seems to be consistent worldwide, however As Omar (2009, p. 374) noted:"Although advertising principles do not vary from country to country, the objectives and methods employed may differ in different markets." As Anholt (2000, p. 8) predicted, it is important for international brands to act locally: "International brands succeed when consumers in each market believe they are being spoken to by somebody who understands them, somebody who knows their needs and who talks and feels just as they do ". His words give rise to a lot of questions, chief amongst them are:" The kind of advertising which would work best in each market environment, the kind of advertisement to be avoided (Zandpour et al, 1994, p. 50). Kotler (1997, p. 309) pointed out that international advertising present challenges at four levels: "What to say (message content), how to say it logically (message structure), how to say it symbolically (message format), and who should say it (message source)?" The following paragraphs discuss them in turn.
These days, organisations are paying great attention on product names and slogans to use in other languages. Language is the foundation to cross cultural advertising. Language must be carefully checked for cultural feasibility as many companies have made big blunders in advertisements of their products. (Payne, 2007).
The message needs to be expressed in one language. International advertising often means that, companies are advertising a product which has a name from a different language. Many companies have had difficulties marketing these products mainly because once translated it does not convey the same impression. Firms therefore have skilled interpreters and translators to remove the communication difficulties. Direct translations into other foreign languages often lose meaning and do not put forward the important points originally predicted.
Colgate launched toothpaste named "CUE"; they introduced the product in France and it was a disaster because the word CUE in French is a slang expression for derriere. (De Mooij, 1997, p. 160)
Baby food producer "Gerber" does not make the right impact in France since the word literally means to spew (De Mooij, 1997, p. 145).
"Mitsubishi" failed to advertise their Pajero model in Spain because the word Pajero means masturbator in Spanish: definitely not the right impression. (Haig, 2003, p. 45)
"IBM" had some difficulties in Argentina with its global slogan: "Solutions for a small planet" and had to fine-tune it to "Solutions for a small world" because the word "Planet" lacked the desired conceptual thrust (Haig, 2003, p. 105).
Culture might be linked to ethnics, national groups, and an age group or to a country. Every individual gains their knowledge about their culture from the society or the group they belong to. Every country has it is own culture, eating, dressing habits change between countries men and women are not treated same everywhere. Culture varies between different levels, so when talking about it, it is important to be clear about the level to avoid confusion. An approach that is true at one level does not mean it is going to be right on another level.
Pivotal to the issues faced by international promoters, is the problem of culture: "advertising is more than words, it is made of culture" (Anholt, 2000, p. 5). In other words, the content of the message should have a local touch.
Culture is the totality of socially transmitted behavior patterns, arts, beliefs, institutions, and all other products of human work and thought characteristic of a community or population." Culture is also learned behaviour. It depends on the environment, not heredity; it is not biologically transmitted. (Keillor et al.2007, p.109)
In 1997, De Mooij (p. 7) wrote that, "Ideally effective advertising means that the values in the message match the values of the receiver. It is the culture of the consumer that should be reflected in advertising". This excerpt puts a lot of emphasis on the values of the targeted nation. Before launching an advertisement it is important to see whether the message conveyed will match with the values of the nation.
In other words, culture is a very complex phenomenon and a challenge to firms that wish to market internationally. How does the firm's product or service fit in with the foreign market's culture? How must it be adapted to fit? Every firm must take its own adjustment and adaptation to satisfy customer foreign customers. (Keillor et al., 2007 p. 109)
Culture plays an important role in international market. It is complex, challenging and always a problem for companies which operate internationally. When a new product is launched, it is the responsibility of the firm to make sure that the product fits in the international market. If there are changes required to increase customer satisfaction, the firm must take the reasonable steps.
Advertising reflects these wider systems of meaning: it reflects the way people think, what moves them, how they relate to each other, how they live, eat, relax, and enjoy themselves. All manifestations of culture, at different levels, are reflected in advertising. In order to analyze advertising as a manifestation of culture at the broader level, it must be understood that culture is expressed in several ways.
The Sony Walkman is often thought to be unique because one can listen to music without being disturbed by others. However this contrasts with Akio Morita Ibuka co-founder of Sony Corporation: "He wanted to listen to music without disturbing others" (Morita et al., 1987, p. 89). This subtlety makes a huge difference in the formulation of the campaign.
Muller sparked a lot of controversy with its self-centred campaign showing a mum depriving its child of the yoghurt with the caption: "there is motherly love, and there is Muller love". (Kiefer & Carter, 2005, p. 68).
Haagen-Dazs was lambasted because of its advertisement which related ice cream to sex and presented it as a product for personal pleasure. It offended the Chinese who share all the good things (Kiefer & Carter, 2005, p. 68).
Values bear hugely on buyer behaviour especially at the problem recognition stage. People in different cultures have different motives to buy a good and it should be reflected in the message of the campaign.
When companies advertise, they must consider a wider system of meaning because it reflects people in many ways for example the way they eat, move or think. Advertising reflects to all cultural expressions at different stages. It is important to understand that the culture can be expressed in more than a few ways to analyze advertising as a manifestation of culture.
Hofstede (1980, p. 57) proposed four dimensions of national culture: "Power distance, uncertainty avoidance, individualism and masculinity". The model can be used in global marketing strategy. If culture has a large effect on customer behaviour, then firms need tools and techniques that analyze cultural differences, so that the firms can avoid the mistake of applying a policy which is not appropriate.
Power distance is "essentially used to categorise levels of inequality in organisations" (Mullins, 2002, p. 25). High power distance countries are autocratic and in such countries, the employees are reduced to a mere condition of "doers". Conversely, low power distance is favourable to a participative management.
Uncertainty avoidance however, related to the tendency to minimise risks or ambiguous situations. Countries that score high in this area are risk-adverse, and they tend to follow proved methods and rely usually on bureaucracy.
Individualism mirrors the "extent to which individuals fitted in a group" (Brewster, Sparrow, & Vernon, 2007, p. 23). In other words, the cohesiveness amongst group members; countries with a high score can be branded "egoistic" and Nations with low levels of individualism are known for their social dimension.
Masculinity is linked to the behaviour and patterns that prevail into a particular culture. In fact, a masculine oriented nation shines by aggressiveness, assertiveness, drive for succeed at all cost while a feminine orientation requires a much less nurturing approach.
Later, an additional dimension, "Confucian Dynamism" (Bond, 1988, p. 8), was put forward. This dimension reflects the length of planning e.g. The Japanese plan for the long-term and this is the basis of their economic growth over the last few years. Conversely, the USA is short-term focused and the bottom line is generally the quarterly meeting.
Hofstede's surveys which were carried around the world in 1980 with IBM employees was rather a methodical assessment of different cultures around the globe. Even though there has been changes in the world from the events that occurred in Eastern Europe and Russia cultural roots are much stronger.
Hofstede's analysis has proved that countries can be explained in four different categories. The first one is individualism versus collectivism, in individualism cultures individual tend to look after themselves and close family members only in collectivism cultures individuals care more about the group. High and low power distance would be the second dimension the difference is countries with high power distance are less democratic and countries with low level of power distance are more democratic.
Masculine and famine is the third on Hofstede's list which refers to equality between males and females in a society. Uncertainty avoidance which relates to self-assurance between individuals in a society is the last demission on Hofstede's list. If the society do not feel threatened from uncertainty avoidance, then that society is does not have any doubt about the future.
The Role of Culture in Multinational Business
Economic and physical environment are important to international firms but not as much as the cultural environment that has an exceptional importance in business.
Because every country has a different culture they require a different approach. A strategy that is successful for a region might not be in another, to avoid failure right techniques and tools should be used. A company would be successful if they can manage the cultural environment and international organizations.
So what kinds of problems arise from cultural diversity? The main problem seems to be the lack of knowledge about different cultures between individuals. Many companies are not clear about the cultures around the globe (Miroshnik, 2002).
Cultural diversity causes problems, because firms usually over generalize techniques and strategies. Employees think that successful marketing strategies can be applied to more than one country, but this often results in failure. If a product has a naked image on the package, it may not be a problem in the western countries, but it will be highly criticized in Muslim world. It does not matter if it is a well-known art work or the company's logo, therefore firms must adapt well into local markets if they want to be successful (Miroshnik, 2002).
Structure of the Message
The structure of the message should be consistent with the culture. Hall (1976) argued that communication could take place in a high/low context. According to him, in low context communication there is the necessity to come up with all the background information. Conversely, high context cultures require a straight approach because everyone has all the background information. Because of the differences of context, Gudykunst & Ting-Toomey (1988, p. 103) argued that there are four communication styles: direct/indirect, elaborate/exact, personal/contextual and instrumental/active. It is therefore, challenging international advertisers to structure their message effectively. A direct/indirect formulation means that the intention of the advertiser is clear/ hidden; the elaborate/exact approach is purely concerned with the content of the advertising. Is the advertisement giving a lot of information or does it go straight to the point of interest. The message might be adequate for one country; however, there is no guarantee it will work internationally due to differences in communication contexts.
For example an UK advertisement of "Lufthansa" was quite indirect and elaborate:"What a day. Lousy weather. A falling stock market. A terrible meeting. A dreadful traffic jam. And then, at last, something to laugh about" (De Mooij, 1997, p. 160).
"KitKat" launched its campaign "Take a break, take a KitKat" In the UK, a couple try to teach a monkey to act like a human. After vain attempts, they sit down in a relaxed posture and have a Kitkat, and the monkey copies them. However, in Netherlands two girls learn how to dive into a swimming pool and take a break. The second adaptation is direct and exact whilst the first is indirect and elaborate (De Mooij, 1997, p. 180).
Understanding the style of communication of another culture allows for the target customers to understand the advertisements (Payne, 2007). A good example of this can be the Honda Accord Hybrid, considered to be a market failure due to their over estimation that people would find four cylinder vehicle that has six cylinder power to be attractive and impressive. The reason was that purchasers of Accord were not interested in the speed. Plus they had to pay $9000 additional amount more for the hybrid. The cancellation of the Honda Accord Hybrid is one of the most spectacular marketing failures of the past five years (Kiley, 2005). The market research needs to be done carefully before the product launched.
The aim of advertising is to communicate with consumers; this implies choosing an appropriate channel. There are two main challenges with this: the format of the advertisement and the media selection.
The choice of the format relates to the educational level of the country. In educated countries such as the UK, it is common to have printed advertisements. In illiterate countries, they are less popular because the customers must be able to decipher what it means. In less educated nations, advertisements are built around clips because the audience can listen to and watch the gesture and body language of the actors.
The second challenge is selection of the media, which is not an easy task. Media selection and technology go together. In less-developed nations such as Chad, Cameroon, the bulk of advertising requires agents to go up and down the street in their cars built with giant speaker, use extensive radios and TV ads. However, in developed areas advertisements are mainly done online. The selection of the right media can also turn out to be a tricky one when there are too many options possible. For example, "advertising in India through newspapers will require contacting 200 daily newspapers. The huge number of media stretches the budget and ultimately affects the frequency" (Omar, 2009, p. 380).
Millions of pounds are used for advertising campaign and it ultimately begs the question: who should be the figurehead of the advertisement? Do we get endorsement from celebrities/professionals? Alternatively, do we use normal people? Which is the safest option in an international setting?
"Gatorade" established itself in the beverage industry by successfully collaborating with the respected Michael Jordan (Shimp, 2003, p. 300). "Subway" experienced a sales boom when the product was endorsed by previously unknown Jared, who was advertised to have lost more than 200 pounds while subsisting on a diet of Subway sandwiches" (Shimp, 2003, p. 295).
Taking a famous person is a double-edged sword. In fact, if the person has huge popularity amongst the target audience then, the campaign will be a success; however if the endorser no longer appeals to the audience the company will inevitably experience a massive failure.
Colours, Numbers and Images
International advertisements should make sure that the colours, number and images used in the marketing campaign are appropriate according to the culture of the country. For example, Patriot Computers came up with the Hot Wheels PC in 1999 that came with Intel chips and Windows 98 software. It was targeted primarily at the boys' market and the hardware was decorated with racing car imaginary including the Hot Wheels flame logo. In addition, Patriot Computers had made a deal with Mattel to produce a Barbie computer aimed at girls. The boys' computer was blue; the girls' was pink with a flowery pattern. Both products flopped as a result of bad product design.
This was a crude attempt at gender marketing, therefore designers need to be involved at the start. It is important to meet with customers expectations by producing the products in shapes that they like, and a survey could be used to find out what could be the reaction of the customers.
Underestimation of religious influences on the marketing environment always creates barriers for global advertising, so that companies need to prepare their strategies by considering religious factors. It is obvious that religious events and customs have been highly considered these days.
According to Beines, Fill and Page (2008), Ramadan is considered as a religious day when individuals spend their time fasting during the daylight hours, so that advertisements can be made while individuals are at home with their family and friends, eating and watching TV.
In a low context culture spoken language carries the emphasis of the communication i.e. what is said is what is meant. Examples include Australia and the Netherlands (Marketing Teacher Ltd, 2008).
Obviously, the influence of religion on individuals can be easily noticed only by observing ourselves and the way religion has impacts on the culture. It is important for global organisations to determine the ways of Islam that can have an effect on the market, where they are going to operate; therefore cultural sensitivity needs to generate intensified awareness.
The educational system is affected by its own history and culture. Differences in education need to be understood by organisations to determine availability of existing customer potential. The literacy rate can also affect the marketer's promotional strategies; a high illiteracy rate may involve the exclusion of printed instructions and more drawings (Beines et al., 2008).
Marketing teacher Ltd (2008) states the level and nature of education differ from country to country. For instance, advertising companies use radio advertising with an audio message or visual media such as billboards rather than written copy in countries where literacy level is low and labelling of products may also a create problem.
There are many effects of education on various levels in marketing, such as low literacy levels which has impacts on earning and consumption, and communications, advertising programmes needs to be carefully thought through. Different educational systems in different countries influence the types of work force and executive skills.
Countries and cultures are known with names that they have made themselves over years and their successes have been seen in certain aspects of their life, culture and industry.
According to market research, French manufacturers were considered as providing high-fashion ladies' shoes while Italian firms provided lightweight men's shoes. On the other hand, European manufacturers' market stiff, heavy and boxy shoes in the U.S. and the U.S. was leading with western boots. It is not easy to change the image as there is already existence of a strong brand in consumers' mind (Jeannet and Hennessey, 2004).
Political and Legal Forces
Political environment of government such as foundations and political parties affect the global marketing activities. There is an existing political culture in every country, therefore organisations going global need to understand the political culture carefully in the countries where they are going to operate and determine the common issues can be occurred by the political environment (Keegan and Green, 2008).
The application and standardisation possibilities of advertising are dramatically influenced by foreign government's regulations as a result of religion, nationalism, and economic situation of the population.
According to Keller et al (2008), regulations vary from country to country and the maze of legal restrictions create barriers for developing a global advertisement campaign.
Advertising regulation can create barriers in the following areas; the types of product that can be advertised, the kinds of data that can be collected from consumers, the types of message appeals that can be used, the times during which advertisements for certain product can appear on television, advertising using children, the use of foreign languages in advertisements, the use of national symbols, such as flags and in advertisements, the taxes levied on advertising expenditures (O'Guinn, Allen and Semenik, 2006)
Production and Cost Limitations
Creativeness plays a significant role when there are a small amount of finance, production limitations, poor-quality printing and low grade of paper available. "For example, the poor quality of high-circulation glossy magazines and other quality publications has caused Colgate-Palmolive to depart from its customary heavy use of print media in the West for other media in Eastern Europe. The necessity for low-cost reproduction in small markets poses another problem in many countries." (Ghauri and Cateora, 2005, p. 412).
The advertising industry tackles with a decline in an economic downturn as clients avoid advertising and most of the projects are postponed or cancelled. People try to be creative and work harder to provide a reasonable budget for the required work (Soter, 2002). Iezzi T. (2008) states that the clients are being more conservative about their advertisements and choose advertisements which are considered safe and sure-shot are being played on.
Beale C. (2008) mentions that advertising agencies are not only facing reduced income but if going at the same rate of cutting budgets, the chances are that the agencies will try and give a lift to the brands they consider under-invested after the downturn is over.
An article in Campaign UK (2008) highlights that in a recession client demands are never-ending which leads to jobs being put at risk and the agencies' ability to service the client effectively. They are ready to spend only if the advertising response is measurable and accurate. It has been noticed that clients tend to favour digital agencies over traditional ones but the silver lining in the cloud is that, whichever form of communication the clients use, there will be creativity in a new form. According to Razeghi A.J. (2008), a recession exposes the unmet objectives and it is easier to find new prospects for product development and use this time to come up with and put across the most disruptive ideas. Creativity is at an all time high because everyone is more aware, thinks and is focused. Some of the most successful innovations included identifying an unmet need and fulfilling it. The biggest mistake that companies do in a downturn is that they stop listening to what the market is saying by cutting down on research and development. The slump is a door to being creative and step out in the market and taking the risk. Consumers are spending less and every decision is taken with care, thus if the product is not extraordinary it may delay the decision making process. The straight solution what companies think is to reduce price, but the companies need to think that how long it took to get that price from the consumer. Even if the sales are going down, a brand is at stake and if creativity is absent, price reductions can kill the brand.
CHAPTER 3 METHODOLOGY
This chapter provides an introduction to the research methodology and specifies the reason for the choice of methodology data gathering methods such as collecting primary data, secondary data, analysis of these primary and secondary data, then sampling method. In order to answer the key research questions, secondary and primary research, will be collected. Further, the limitations of the study will be also mentioned in the study.
The analysis of secondary and primary data needs be in an efficient way in order to answer the key research questions. The steps followed during the process of gathering data for the research will be;
Defining the research problem and establishing the research objectives
The study will include a description of the research problem with understanding the main issues to determine particular objectives.
Developing a research plan
When the management problem and literature review has been completed, the required information is collected to provide the answers to the research objectives (Lawley, 2007, p.33). So 'A research design is a master plan specifying the methods and procedures for collecting and analyzing the data needed' (Zikmund, 2003, p.65).
The aim of this study to determine factors having effect on the adaptation of global advertising, therefore explanatory research method will be used to identify the reasons for failure of international advertising.
Exploratory is defined as 'The objective of exploratory research is to collect preliminary information that will help define problems and suggest hypotheses '(Kotler et al. 2006, p.122).
Exploratory research is to provide a better understanding for researcher to create introductory background and propose issues that can be useful for a more comprehensive study in the future (Bearden, Ingram, Laforge, 2007, p.130). Exploratory research will consist of a literature review, case analysis and interviews. Additionally, the evaluation of prior research will provide a better approach to recognize the issues.
Data collection methods
Data can be obtained from primary or secondary sources and primary data consists of information obtained firsthand by the researcher on the variables of interest for the specific aim of the project. Secondary data refers to information gathered from sources already existing (Sekaran, 2003). Data collection can be done by questionnaires, interview surreys, observation, test marketing and panels (Blythe, 2006). In non-directive or semi-structured interviews, the purpose is to hearten the interviewer to give complete information about the subject instead of responding to polar questions which are sometimes called yes-no questions. It is similar to the group discussion in which the interviewer is encouraged to be aware of the purpose of the research (Schmidt and Hollensen, 2006, p. 90).
Primary data is "gathered and assembled specifically for the project at hand" (Zikmund, 1994: 40)." According to Schmidt, Hollensen and Svend, (2006), primary data can be gathered from surveys (mail, telephone), interviews (mall intercepts, personal interviews), and focus group observation (personal, mechanical).
A semi-structured in-depth interview is prepared with nine open ended questions. The purpose of using this type of interview is to enable the interviewee to respond the questions freely and in as much depth is required. Moreover, the interview will include questions about the significance of taking into consideration cultural differences when advertising internationally. The created interview questions will be sent to the advertising company called "kinetic" in Turkey and questions will be answered by the managing assistant, Banu Tekin.
The secondary research consists of "reanalysing data that have already been collected for some other purpose" (Saunders, Lewis and Thornhill, 2003: 188). In this study, the researcher will be keen on the information about global advertising issues faced by international organisations and numerous sources are provided to create part of the theoretical framework.
Secondary data can be gathered from several sources such as books and periodicals, government publications of economic indicators, census data, statistical abstracts, data base, the media, annual reports of companies, financial databases and others (Sekaran 2003). The information required to conduct the project will be gathered through the use of external sources of secondary data such as published books and articles. The main part of the study focuses on the company, kinetic, and all the necessary information will be collected from company and trough the use of its website.
Secondary data provides a good starting point for research and often assists to determine issues and research objectives.However secondary research has numerous benefits such as the fact that it is fairly easy to be accessed, it saves money and it is not time consuming, it also has disadvantages. It is significant to know that the data is relevant to the specific problem dealt with in order to use the secondary data effectively. The accuracy of data is vital and it should be gathered from original source and from an intermediate and third-hand report (Ghauri and Gronhaug, 2002). Firms must evaluate secondary data carefully to ensure that it is relevant, accurate and current and impartial.
So, all the rules and theories mentioned above will be followed during the analysis of the secondary data and information related to the project topic which have been already gathered and is going to be gathered from different sources. The gathered data and information will be evaluated carefully and all disadvantages of the secondary data will be minimized to provide an effective and efficient research.
Analysis of data
Analysis can be considered as the categorization, the aggregation into constituent parts, and manipulation of data to attain answers to the research question or questions underlying the research study. (Grover and Vriens, 2006, p.195)
There are a variety of techniques available for evaluating research data. The types of analysis obtained from data needs be anticipated at the design stage, then the appropriate data collection forms are developed. The gathered data from different sources can be analyzed by quantitatively and qualitatively. (Grover and Vriens, 2006, p. 195)
The project will be based on analysis on the use of past data from varied theories from different books, journals, and articles; as well as data from interviews, observations, surveys self recorded, and documentation and it will present the factors influencing the adaption of global advertising in other countries. The obtained secondary and primary data will be evaluated both quantitatively and qualitatively.
The main purpose of using the quantitative data is to compare, contrast and evaluate the links between variables, and it needs to be indicating, determining issues, explaining findings, and categorizing the data which will propose a basic knowledge for examining the increase of issues in the goals and objectives. Moreover, the analysis of the problem is stated briefly and clearly.
Sampling is defined as the process of taking parts from a delineated population to explore these parts with the purpose of building judgements for the parts of the populations which have not been examined before (Bradley, 2007, pp158).
With selection of the interviewee who is considered to resolve the issues, sampling which is one of the important methods of primary research is used in the project, and the process also takes less time and less money which is benefit of the method.
Sampling contains different stages such as purpose, population, appropriate source for the population members, sampling type and approach procedure, sampling size, fieldwork and minimizing the sampling errors (Bradley, 2007).
The sample organisation of the project will be Kinetic. The firm will state the issues that global advertising faces and what strategies are undertaken which will be the practice part of the study after the theory part.
During the process of the research, conducting a general statement from whole findings has been fairly complex by reason of using a small size of sample. The main limitations on this research were time, distance, language, and words limitation which did create barriers to provide an extensive primary data.
First of all, the questionnaire had been designed but English is the second spoken language in Turkey, therefore, before the questionnaire was sent to executives by mail, it was translated in to Turkish to give a better understanding of what the exact requirements are. Additionally, managers will be able to give longer answers to the questions. When answers were received, they translated into English again. It was likely to possible to lose their meaning while translating into English to Turkish and Turkish to English.
Although the questionnaire was planning to be conducted face-to-face, .........( to be continue)
However, the researcher is faced with unexpected problems, there was enough time up to collect all the data via e-mail.
CHAPTER 5 PRESENTATION OF FINDINGS AND DISCUSSION OF RESULTS
This chapter presents the analysis of the findings which obtained from the primary data with use of an open-ended questionnaire. The aims and objectives set in the introduction part and related to the literature review. Difference between the ideas and views discussed in the literature review and findings will be taken into account and the main purpose is to evaluate the whole data in order to meet with the aims and objectives of the project.
Interview Questions and Answers
- What date did you launch your business?
Banu Tekin, Managing Assistant (Kinetic): December, 2009)
The Turkish advertising market had 5%, approximately £70 million, growth in 2007. The company in Turkey is run from Istanbul branch and it was established in June 2007. Kinetic has been providing traditional and non traditional planning and buying services, ambient and retail advertising with production and the firm also offers services for MindShare, Mediaedgencia, Mediacom and other local media agencies. However Kinetic was inexperienced when it was lunched, it has rapidly developed and has become one of the most powerful advertising company in the competitive market.
- Do you recruit local or expatriate?
According Kinetic policy, in each country where the company is operated, local employees are preferred to work with and it employs new staffs, who have good knowledge about industry. Therefore, the best candidate for the open position is searched and if it is necessary, candidates may be interviewed by headquarters and the most appropriate candidate is selected by headquarter for managerial positions.
Employing expatriate employees depends on the position says executive of Kinetic because, certain positions require certain skills. The first step is to find the right candidates and then interview and test them about their new positions and if they are successful, they are employed by the company. Furthermore, Kinetic demands a final confirmation from the headquarters for managerial positions.
Therefore Kinetic recruits local employees such as Turkish employees in their Turkey's branch. In their overseas branches, this method has been applied since the company was first set up and so far there are no disadvantages to it.
- How has the business gone so far?
Kinetic, from the date of working in Turkey and around the world, has been providing a good services for the companies such as Danone, HSBC, Garanti Bank, Ikea, Colgate, and Michelin for many years and has managed to hold its potential customers thanks to good quality of customer service and its experience.
There were few customers at first, but with a successful management, we have grown quickly and now have a high number of customers said the customer relation manager of Kinetic when she was asked about the company's success. Profit has increased rapidly and the company seems to be on the right track. The success of the company has been linked to two factors. Working with right people is the first step that is why the firm carefully selects their employees. Secondly, it applies the right strategies with a good international policy; in addition to this the firm has a good knowledge about their customers and can meet the customer requirements.
The company is successful and has been profiting since it has been set up. The Company's aim was clear to be number one in the market and have managed to get on the top in such a short time. This clearly shows that company has a good workforce and has used appropriate techniques. Kinetic is known by its creativeness and they have used this power to increase the customer pleasure. Not only they provide excellent service to their customers it also focuses on customer happiness and if the customer is not happy, it quickly moves in and solves the problems. This gives the company a big advantage compared to their rivals.
Kinetic focuses on outdoor advertising. They have become experts in this field and they have been also able to control 40% of the market in Turkey. Kinetic successes have been link to their flexibility on the company's policies.
The company applies their own strategies such as understanding their customers and respond their requirements, using their creative skills to make an impression on their customers. Furthermore, Kinetic has set their aim as outdoor market and are trying to grow to have even bigger slice in the market.
The customer profile of the Kinetic is not only national, it is also international. This is because they have strong ties with different business sectors. It has worked together with the media, the medical firms and the food sector, therefore it has a wide range of customers.
- What is approximate expenditure for global advertising every year and did global crisis affect the global advertising?
Annual ad spending of Kinetic is around 4 million TL, which is approximately £1,698,184 every year. Advertising industry is one of the first sector which is affected from the crisis, but advertising is considered as the first way out from the credit crunch. As a result of the global crisis, local and global customers' advertising campaigns have been reduced, however it did not affect the profit of Kinetic. The company has taken the opportunities of the global crisis and has made various investments and compensated the damage of the recession. With new deals and contents, we are able make profit at the end of 2009.
Regional newspaper publisher Johnston Press said that it will hit City Forecasts this year as the decline in advertising revenues slows. The company said advertising revenues fell 22% in the first 18 weeks of the second half as opposed to 33% in the same period of the first half. Johnston said it is "confident of delivering an operating profit in line with current market expectations (£64 million)" (Evening Standard, 11/11/2009, p.33).
- What communication channels are used for advertising?
The purpose of advertising is to communicate with consumers; this requires the use of an appropriate channel. Written and visual media included Newspapers, Magazines, Radio, TV, Internet, and Outdoor channels are used by Kinetic to communicate with their customers.
- How long is the duration of an advertisement such as TV, radio, internet and newspapers?
The average duration of an advertisement broadcast is between 20-30 seconds and but this varies according to the production time.
- Are global adverts changed to refer to the culture in Turkey before being published?
Kinetic said most of the companies do not change their adverts only a small number of companies do. If an advert is created abroad changes are only made to the text because not everyone understands English in Turkey, generally there no changes to visual content. Another important point is that if the product that is been advertised is a new brand then no changes are made to advert at all. Kinetic also said that international companies are aware about the importance of local advertising. A good example would be Coca Cola adverts specially produced for Ramadan.
According to the company, firms should refer to special days and events, by doing so they can reach out even more people. For example Coca Cola and Knorr, which are operating globally, a specific ad is being done for Ramadan. Kinetic does prepare special ads for companies like Knorr, adverts were prepared to be displayed during Ramadan and the results were positive. Otherwise the product would not gain as much as success that it does.
Moreover, the companies sometimes make changes in order to communicate better with local people. Nike and Walls has previously made changes to their adverts so they can get a better link with the customers.
- Can you explain the challenges that international advertisement face in global marketing?
An advert has to be adapted locally in order to be successful. Because the company work with international organizations as result of this they get adverts that they have to adapt in as well. Because the product that is advertised is a brand from abroad and has been created with international standards; the advert too has to be parallel with it. Another important point is that the customer has to feel that, they are using an international brand and they have no difference to people in other countries in fashion, quality etc.
It is not necessary to adapt the global advertising to local environment. Although we adapt 70% their customers from abroad, they only adapt 20% of the ads. However some of our customer use global advertisements, some of them use locally adapted advertisements.
Kinetic seems to be more confident with global adverts and have said that they do not have any difficulties with it. Although they get 70% their customers from abroad they only adapt 20% of the ads. The principle does not change with Kinetic either, the customer must get that special feeling of the advert belongs to a global company and is well known.
To conclude, the ads are still changed to meet the international standards. Companies prepare good quality products but without the right advertising, the product will not be a success. This is why the advert has to be as good as the product.
- Do you think has Turkey been affected by cultural differences in recent years? If your answer is yes, can you explain why?
Kinetic manager said that their outdoor advertising has been badly hit due to censorship on adverts. She believes that Turkey is losing its secular regime and the control is in hands of radical Islamists. Many of the changes they made to adverts were not necessary. She gave a good example of ARCELIK, which is a well known company in Turkey, had prepared an advert for Mothers day. It was published normally in newspapers apart from on
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