Promotion comes into picture when a global company wants to communicate its offering to potential customers. How an organization chooses to promote its products and services can have a direct and substantial impact on its sales.
Advertising can create a popular culture and a culture may influence the ad as well. Culture’s impact in advertising is prevalent, especially in culturally-sensitive issues like religion and politics.
Procter & Gamble had problems advertising the Pert Plus shampoo in Saudi Arabia, where only veiled women can be shown in TV commercials. The company had to show the face of a veiled woman, and the hair of another from the back.
A global marketer can consider budgeting rules such as percentage of sales (creating budget as a percentage of sales revenues), competitive parity (taking competitor’s ad spending as a benchmark), or objective-and-task (treating promotional efforts to achieve stated objectives). Global markets use three approaches to reach allocation decisions −
● In bottom-up budgeting, the units independently determine the market budget and request resources from headquarters.
● In top-down budgeting, the headquarters set a total budget and split up the resources.
● Decisions may also be made at a regional level and submitted to the headquarters for their approval.
When global marketers choose a standardized approach, the same global campaign is applied throughout all countries.
● Advantages − Achieving economies of scale in ad campaigns to reduce cost, maintaining a consistent brand image.
● Barriers − Cultural differences resulting in negative or ineffective consumer response, advertising laws and regulations, variations in degree of marketing development.
The NIH Syndrome: A Barrier to Standardized Approach
“Not Invented Here” syndrome occurs when agencies or business subsidiaries reject using a standardized campaign simply because they did not invent or come up with the campaign.
Global media decisions are a big concern for global firms. The media buying patterns vary across countries. A global marketer must find the best media channels in a market.
Foreign regulations on advertisements may be present in a specific country. Research of the laws in the country of operation is necessary before developing a campaign, to avoid legal implications and waste of time and money.
Choosing an ad agency may prove more effective due to their understanding of the country and market they are doing business in.
Sales events, direct marketing, sponsorships, mobile marketing, product placement, viral marketing, and public relations and publicity are also applicable.
A GIMC is a system of promotional management that coordinates global communications – horizontally (from country to country) and vertically (promotion tools). GIMC is meant to harmonize the promotional and communication disciplines in every way. All communication vehicles may be integrated so that they convey the single idea to all concerned in a unified voice.