Chapter 17 Global Promotion ECommerce and Personal Selling

Outline Global Sales Promotion Other Promotional Tools Direct Marketing E-commerce Global Personal Selling Takeaways.

Global Sales Promotion Tools 1. IN-STORE (P-O-P) AND TRADE PROMOTIONS - - WATCH REGULATORY PROBLEMS (IKEA IN GERMANY) 2. EVENTS AND SPONSORSHIPS - - GLOBAL COMMUNICATIONS WITH GLOBAL BRAND (FUJI’S OLYMPIC COUP, WINDOWS 95) 3. CROSS-MARKETING -- MERCHANDISE THAT EXTENDS AND BUILDS THE BRAND

Global Sales Promotion Tools 4. PUBLICITY - - (BILL GATES AND MICROSOFT, PHIL KNIGHT AND NIKE) 5. PUBLIC RELATIONS - - (NESTLE’S BABY FORMULA, NIKE’S SWEATSHOPS ) 6. INTERNATIONAL TRADE FAIRS -- (MICROLOG EXAMPLE IN CH. 4)

In-Store and Trade Promotion IN-STORE: promotional activities inside the store TRADE: promotional activities targeted at channel intermediaries • In-store promotions are more localized than advertising • In-store promotions need to be supported by trade promotions • Different countries/cultures have different attitudes towards coupons • Different countries have different distribution infrastructures that limit transferability of certain in-store/trade promotions • Sales promotion needs to be localized because of country-unique restrictions/regulations

Country Regulations of Promotions

Sponsorships and Cross-Marketing SPONSORSHIPS increase with the advent of global media and global events (e. g. World Cup, Olympics). Products associate themselves with globally recognized sports figures (e. g. Tiger Woods & Nike) CROSS-MARKETING of related products leverage a strong brand name into product line extensions (e. g. Burberry’s baby products)

The New Promotional In-words • Event marketing • Cross-marketing • Product placement • Cause marketing • E-commerce • Pop-up ads • Banner ads • Experiential marketing

Event Marketing: The Introduction of Swatch

Global Publicity PUBLICITY is the publishing of news about the company and its products. Very prominent in hi-tech industries. GOOD NEWS – wherein positive press coverage enhances consumer interest in the company and its products BAD NEWS – even negative publicity helps keep the brand name in the public eye (e. g. Benetton), although some may of course damage brand equity PRODUCT PLACEMENT – using branded products in film/TV (e. g. BMW Z 3 in James Bond’s Goldeneye)

Global Public Relations GLOBAL P. R. – focuses on creating goodwill toward the corporation as a whole. Ha become increasingly important because of antiglobalization sentiments. Global PR targets various groups of stakeholders such as: Stockholders • Employees • Customers • Distributors • Suppliers • Financial community • Media • Activist groups • General public • Government

International Trade Fairs Participation in International Trade fairs is a way of identifying potential distributors in a new local market. At trade fairs, local marketers can introduce a company’s latest products, discover industry trends, & spot new competitive developments. Participation involves preparation of product and sales materials, opening a booth, sending a team – plus paying a sometimes steep fee. Fairs cost money.

Direct Marketing DIRECT MARKETING: an interactive marketing system that uses one or more advertising media to effect a measurable response and/or transaction at any location. • MAIL ORDER – catalogs, sales offers through “snail” mail • TELEMARKETING – phone calls from companies to households • DIRECT RESPONSE TV (DRTV) – TV commercials with phone numbers to let viewers call for purchases.

Direct Marketing depends on… • 1. CATALOG OF PRODUCTS (“STORE”) • 2. NAMES, ADDRESSES, TELEPHONES, FAXES, EMAILS • 3. TOLL-FREE NUMBERS (1 -800, 1 -888) • 4. CREDIT CARDS • 5. STANDARDIZED, RELIABLE BRANDS (GLOBAL BRANDS)

Direct Marketing is often outsourced… 1. “DO IT YOURSELF” – the firm develops the market and the necessary contacts on its own, very labor-intensive & costly 2. MARKETING INTERMEDIARY – the firm turns the product over to a direct marketing company specializing in international marketing through a contractual relationship; the intermediary then sets-up the infrastructure & local contacts 3. STRATEGIC ALLIANCE – the firm develops an alliance with a direct marketing company in the local market; this leverages the local company’s existing infrastructure and contacts

E-Commerce Pros E-COMMERCE: buying & selling of goods/services online, a. k. a. online marketing; the online marketplace is naturally global PROS • Easy and convenient for the customer • Creates a natural on-to-one relationship between buyer and seller • Fosters customer loyalty and increases customer retention rates • Helps the company focus on providing customer value • Lowers costs for buyers and sellers from the pre-purchase stage to the post-purchase stage • Facilitates price comparisons

E-Commerce Cons CONS • Can reach only a certain segment, those with desktops and Internet access • Cannot provide the full tactile experience with the product or the personal interaction in services • E-commerce needs good electronic communication links • Customers are put off by computers and technology • Perceived risks involved can be great • Without credit cards, e-commerce would be unthinkable

Successful E-Commerce Cases SERVICES PRODUCTS • Airline tickets • Personal computers (e. g. Dell) • Tourist packages • Books (e. g. Amazon) • Banking services • Computer software • Brokerage services • Cameras • Rental cars • Leisure apparel (e. g. Eddie Bauer) • Hotel reservations • Sports equipment • Compact discs

Successful E-Commerce: B 2 B E-commerce has been particularly successful in business-to- business transactions. Reasons: Many products use standardized components where price is the only concern. The Internet makes it easy to compare prices – and entry barriers are low for new entrants. Technology is diffused rapidly so new entrants can access state-of-the-art technology. Cost pressures inside the corporations force the use of lowcost suppliers.

Global Personal Selling Culture affects the “people skills” of the global marketer. Good salesmanship varies across countries. Personal selling is usually the least global of all marketing activities.

Global Personal Selling How transferable are selling strategies & techniques? The following are factors that affect transferability: • DIFFERING HUMAN RELATIONS (e. g. the role of a salesperson is looked down on by hierarchical cultures) • DEGREE OF MARKET DEVELOPMENT (e. g. level of customer sophistication) • DIFFERING REGULATORY ENVIRONMENTS (e. g. salesperson costs escalate in countries where fringe benefits are high) • GEOGRAPHIC & PHYSICAL DIMENSIONS (e. g. climate, transportation conditions, population density)

Global Personal Selling Presentations made during a sales visit usually consist of five distinct stages: 1. ATTENTION – get the customer to listen to you 2. INTEREST – get the customer interested in what you have to say 3. DESIRE – get the customer to desire what you are selling 4. CONVICTION – get the buyer convinced that the offer is a good deal 5. ACTION – get the customer’s signature on the contract In foreign markets, these stages are still valid but the salesperson needs to adapt these stages to the local culture.

Culture and Salesmanship LOW CONTEXT CULTURES HIGH CONTEXT CULTURES PREPARATION GREAT PRODUCT APPEARANCE THE “PERSON” ENTHUSIASM CULTURAL AWARENESS SELF-CONFIDENCE RELATIONSHIP ORIENTED GREAT CLOSER OF TRANSACTION

IMC- Integrated Marketing Communications IMC – combining various communication disciplines (e. g. media advertising, direct marketing, sales promotion, internet advertising, & public relations) to ensure clarity, consistency, & maximum communications impact. IMC examples: • Intel in China – distribution of bicycle reflectors • Citibank in Thailand – credit card agents at malls • Yonex in Indonesia – badminton team sponsorship

Takeaways In addition to media advertising there are now a number of alternative promotional tools for creating global presence & visibility. Global marketing communications need to be integrated so a unified image & message is communicated.

Takeaways The global promoter should be aware that local regulations can make the implementation of a global sales promotional campaign difficult in any one country. Use local representatives to find out exactly what the limits are.

Takeaways With advances in the Internet, telecommunications, express mail, address list development, & credit card availability, direct mail is transformed from a simple promotional tool to a low-risk direct marketing option. It is a new mode of entering a market, a new way for small businesses to promote and sell its products abroad.

Takeaways E-commerce is a new medium which combines one-to-one communication & sales transactions. It is growing fast especially in services & in B 2 B.

Takeaways Personal selling may be the last frontier for globalization, with local people necessary for customer contact. With the globalization of industries & markets, local salespeople will also be part of the front-line service providers for global customers.