Global Advertising Scope, Challenges

Global advertising or international advertising consists of collecting, processing, analyzing and interpreting information.

There are two main purposes of international advertising research:

(1) To assist business executives to make profitable international advertising decisions for their specific products and services and

(2) To contribute to general knowledge of international advertising that is potentially useful to a variety of business executives, educators, government policy makers, advertising self-regulatory organizations and others interested in understanding the process and effects international advertising.

Common characteristics and cultural differences

Product or Service Offering

In global marketing, a company offers the same products and services across the board, in multiple countries. Think about banks, insurance companies and large retail chains like Wal-Mart.

In international marketing, products and services are tailored to specific countries. Think about Sharia finance products, which are only offered in Islamic countries or to Muslim customers in non-Muslim countries or meat that is banned from Israeli or Muslim diet.

Marketing Staff

Global marketing personnel tend to work at the company’s headquarters and generally are a diverse group of people. They possess various skills that collectively mesh well together, and take a global view of the company’s market.

Conversely, in international marketing, team members tend to hail exclusively from the same country or a country with linguistic or cultural affinity with the primary country.

Marketing Budget

The budget of a global marketing team is managed directly from the corporate headquarters. For example, Nike sets a global marketing budget, which then trickles down to local offices.

In international marketing, however, budget issues are negotiated and handled at the local level, within the subsidiary. Take for example McDonald, which runs local ads, some of which you will never see in another country.

Promotion Tactics

When it comes to promotion tactics, global marketing teams try to run ads and other communication ploys that are in sync with a global audience.

An excellent way to understand is to see ads that were run during the 2014 FIFA World Cup a perfect mix for global marketing: global sports event, billions of viewers, one passion for the game.

In international marketing, commercials and other promotion tactics are tailored for the local market.

Operational Autonomy

Marketing does not mean you sit in a corner office and think about how to sell a product. The typical marketing mix has four components, what experts call the 4Ps: product, price, promotion and place (of distribution).

So in terms of operational autonomy, global marketing teams tend to run everything from A to Z, from the corporate headquarters, whereas international marketing teams handle things domestically.

Social Media

By reviewing their social media pages, you can quickly see which companies favor global marketing over international marketing and vice versa. For example, you will notice that McDonald adopts an international marketing strategy, with Facebook pages as diverse as McDonald’s Malaysia, McDonald’s Brazil, McDonald’s Italia and McDonald’s Polska (Poland).

Conversely, Nike or Caterpillar runs a single page.

Customer Engagement

Customer engagement is more active in international marketing. By setting multiple communication channels, a company can better engage with fans and customers at a local level.

That is not to say that global marketing is less effective when it comes to customer engagement the tactics are just different.

But it is clear that international marketing tends to produce a higher level of engagement than global marketing.

Advertising

In global marketing, commercials are run all over the world, whereas international marketing favors ad airing in the local market exclusively or in similar markets, at most.

Some products lend themselves pretty well to global advertising. We already talked about sport gear; you also have movies and songs as well as technology products.

Other products, conversely, cannot exist in some countries because of cultural prohibition or legal censorship.

Market Research and R&D

Market research and R&D are as deep and broad in global marketing as they are in international marketing.

Sometimes, though, global marketing can produce big flops when market research has not properly conducted or local customs thoroughly studied. Think, for example, of Chevy Nova’s and Mazda LaPuta’s unfortunate stints in the Spanish market (in Spanish, ‘no va’ and ‘la puta’ mean ‘it doesn’t go’ and ‘the whore,’ respectively.).

Other product flops include the Ben-Gay aspirin, McDonald’s Arch Deluxe, and the Cocaine Energy Drink produced by Redux Beverages.

Hybrid Structure

Our number 10 example is not really an example of comparative global marketing vs. international marketing analysis, but an illustration of how a hybrid structure – international and global can help companies succeed.

Coca-Cola used that mixed tactic effectively in the earlier days, and is nowadays followed by every company, from Mercedes Benz to Frito Lay to Procter & Gamble to McDonald’s.

Every culture could benefit from Nike, since shoes are a benefit to everyone with feet (which is virtually everyone). The same is true of Caterpillar, since industrial machinery helps to advance mankind in general through more efficient construction. On the other hand, if it is a product that only serves one sub-set of people, or otherwise excludes certain subsets, then an “international marketing” approach is necessary. Companies with risqué or culturally insensitive products can’t use the same approach everywhere. For example, alcohol and lingerie companies wouldn’t have much fortune in many middle eastern companies where drinking and dressing inappropriately are not widely viewed as acceptable. Cigarette companies would need to modify their message for more socially conscious populations. In these scenarios, international marketing would work better and either no marketing, or specifically tailored marketing would be of greater benefit.

Challenges

Though the world is advancing in terms of information technology, innovative and superior methods of organizing marketing efforts (like horizontal organisation, network organisation, virtual organisation), global efforts for smooth international trades, and so forth, yet international marketing is not that much easy to pursue, it has become a challenge to accept.

1. Tariff Barriers:

Tariff barriers indicate taxes and duties imposed on imports. Marketers of guest countries find it difficult to earn adequate profits while selling products in the host countries. Sometimes, to prevent foreign products and/or promote domestic products, strategically tariff policies are formulated that restricts international marketing activities. Frequent change in tariff rates and variable tariff rates for various categories of products create uncertainty for traders to trade internationally. Antidumping duties levied on imports and defensive strategies create difficulty for exporters.

2. Administrative Policies:

Bureaucratic rules or administrative procedures both in guest countries and host countries make international (export and/or import) marketing harder. Some countries have too lengthy formalities that exporters and importers have to clear. Unjust dealings to get the formalities/ matters cleared create many problems to some international players. International marketers have to accustom with legal formalities of several courtiers where they wants to operate.

3. Considerable Diversities:

Different countries have their own unique civilization and culture. They pose special problems for international marketers. Global customers exhibit considerable cultural and social diversities in term of needs, preferences, habits, languages, expectations, buying capacities, buying and consumption patterns, and so forth. Social and personal characteristics of customers of different nationalities are real challenges to understand and incorporate. Compared to local and domestic markets, it is more difficult to understand behaviour of customers of other countries.

In the same way, as against domestic markets, to design and modify marketing mix over time for international markets seem more difficult. Market segmentation, product design, pricing, and distribution need more information and efforts. Promoting products in international markets is a formidable task. Message preparation and execution in suitable media in international markets is not easy game to play.

Language and religious diversities are the real challenge for international business players. There are 6000 languages in the world. China (20%) is the largest in term of native speakers, followed by English (6%), and followed by Hindi (5%). Yet English is recognized as global business language.

English speaking countries can contribute the largest share (40%) in global business. Religious diversities seem difficult to cope with as they determine needs and wants of people. At present Christianity is the largest in the world (1.7 billion), followed by Islam (1.0 billion), followed by Hinduism (750 millions), and followed by Buddhism (350 millions).

4. Political Instability or Environment:

Different political systems (democracy or dictatorship), different economics systems (market economy, command economy, and mixed economy), and political instability are some of real challenges that international markers have to face. Political atmosphere in different courtiers offer opportunities or pose challenges to international marketers.

Governments in different nations have their priorities, philosophies, and approaches to the international trades. They may adopt restrictive (protectionist) or liberal approach to international business operations. Especially, political approaches of dominant nations have more influence in international marketing activities.

Long-term trend of global political environment is unpredictable and uncertain. Economic policies of different nations (industrial policies, fiscal policies, agricultural policies, export-import policies, etc.,) do have direct impact on international trade. Drastic change in these policies creates endless difficulties to international traders. While dealing with international markets, international political and legal environment needs a special attention.

5. Place Constraints (Diverse Geography):

Trade in foreign countries of far distance itself practically difficult. In case of perishable products, it is a real challenge. Exporting and importing products via sea route and making arrangements for effective selling involves more time as well risks. Segmenting and selecting international markets require the marketers to be more careful.

6. Variations in Exchange Rates:

Every nation has its currency that is to be exchanged with currencies of other nations. Currencies are traded every day and rates are subject to change. Indian Rupee, European Dollar, US Dollar, Japanese Yen, etc., are appreciated or discounted at national and international markets against other currencies. In case of extraordinary and unexpected moves (ups and downs) in currency/exchange rates between two courtiers create serious settlement problems.

7. Norms and Ethics Challenges:

Ethics refers to moral principles, standards, and norms of conduct governing individual and firm’s behaviour. They are deeply reflected in formal laws and regulations. In different parts of the world, different codes of conduct are specified that every international business player has to observe. However, globalization process has emphasized some common ethics worldwide. Corruption is another issue relating to business ethics.

8. Terrorism and Racism:

Terrorism is a global issue, a worldwide problem. People of the world are living under constant fear of terrorists attracts anywhere in the world. To trade internationally is not economically risky, but there is the threat to life. Racism also restricts international trade activities.

9. Other Difficulties:

Besides these problems, there are many obstacles in international markets, such as:

1. Changing ecological environment and global warming
2. Difference in weathers and natural climates
3. Inappropriate or inadequate role of international agencies supporting and regulating international trades
4. Natural and man-made calamities
5. Difference in currencies, weights, standards, measures, and marketing methods
6. Protectionist approach of some countries
7. Economic crisis across the globe.