Financial markets are the principal media through which corporate value is exchanged, yet this road to success is littered with failed investments and flopped attempts. The smart investor gathers as much information as possible, than analyzes it thoroughly, before placing money on the line.

Marketing plans are the principal way goods are introduced and promoted, yet this road to sales growth is littered with failed ideas and flopped attempts, as well.

Like an investment bank deciding where to put its money, a marketing department must also conduct research in order to gather the information necessary to not only minimize the chances of failure, but to assemble the optimum strategy for growth.

This is especially true in international marketing- an area into which many companies launch themselves without adequate research. Whether due to assumptions of similarity to the home market, or simply not knowing what questions to ask, many a product has been derailed because the marketer did not properly form a picture of the sales environment, creating a fatal strategic flaw.

Data types

There are two types of research available to market researchers: Primary data is specific to the marketing task at hand, and is collected specifically for that task. Secondary data is previously collected information that is also relevant to the current marketing task.

For example, a team introducing a high-tech smartphone to a new country might gather primary data in the form of a questionnaire asking which featurepeople expect from their mobile phone. They might also use secondary data, such as census reports, to determine the average income of their target market demographic. Cross-referencing the two data sources would help the manufacturer decide which feature seat and price point would best position the phone in the market.

Because it is specifically constructed for the problem at hand, primary data can be viewed as highly reliable. However, it is expensive and labor intensive to gather, as it involves manpower and time in the field.

Secondary data is much less expensive, often free, in fact. Government agencies in charge of national economic development and foreign investment are more than happy to publish reams of statistics, research results, and webpages. But in countries lower down on the economic development scale, relevant data may not always be available.

Also, secondary data validity is dependent upon the original gatherer. The aforementioned government agencies use their statistics as sales tools to encourage foreign investment, and that must be taken into account when analyzing the often rosy numbers they provide. In addition, timeliness of the data must be considered.

With both types of data, it is important to apply relevant, statistically sound analysis to avoid misintrepretations or skewed results.

The chief reason many companies rely too heavily on secondary data is cost. Doing primary research, whether in-house or through a market research firm, can be extremely expensive, but often it is the only way to develop a clear picture of the viability of a market, and the best strategy to succeed within it.

Primary data gathering techniques

The text points out that cultural preferences play a large part in determining how data is gathered. US firms go for a more numbers-heavy approach, whereas a Japanese firm might use a more people-oriented method, visiting dealers an talking to them about the consumer behavior they witness first-hand. In any case, triangulation of data, using two very different approaches and comparing the similarity of the results, can be used to ensure validity and accuracy.

Common methods of data gathering are observation, focus groups, personal interviews, experimental techniques and surveys. Each yields a different type of information and has its own up and downsides.

Observation involves sending trained observers into the field to note firsthand how a product is used. The text cites how Nissan did this to research American reaction to its Infiniti line of luxury cars. In this case, the observation of the American preference for 'bells and whistles' as oppostd to the Japanese asthetic of luxurious simplicity prompted a redesign of the cars. As the text metions, the same approach was also used by Volkswagen in their decision to reposition their cars as fun and exciting to drive.

Observation is not always hidden-camera stuff. Best Western's approach involved senior citizen couples agreeing to videotapings of their cross-country drives, allowing the hotel chain to get a firsthand look at how older couples decided where to stay. As a result of this gathered data, the chain decided that raising the senior discount abouve 10% was not necessary, and did not provide additional incentive for seniors to choose Best Western.

This approach can be expensive, especially when using highly educated anthropologists and ethnographers to do the observing,but it can also eliminate the isolation between the boardroom and the customer, showing decision makers how their products are actually purchased and used versus only how the numbers suggest they are consumed.

Focus group research involves sitting down with several people who represent the target market, giving them little sandwiches, and asking them in-depth questions about various aspects of the product or market. Sometimes, they get pizza. Personal interviews are pretty much one-on-one versions of focus groups.

While the small sample size invalidates the focus group or personal interview as a statistical tool, they do provide clues as to customers' motivations, desires, or product understanding. Like observation, they can assist marketers with insight on a personal level, helping to identify triggers and avoid subtle pitfalls along the way.

As you can imagine, focus groups and individual interviews can be time consuming to hold. There's also considerable capital outlay, much of that in the way of little sandwiches or pizza. Group members with stronger personalities can dominate the discussions, or cause more introverted participants to hold back their feelings on the discussion topics. Aditionally, certain cultures might be more reticent when participating in these interviews.

The text explains experimental information gathering techniques as attempts to gather quantitative data using the scientific method to ensure the validity of the data. The survey is a commonly used method of quantitative information gathering.

The big stumbling block with surveying across national boundaries is data incompatibility. The text demonstrates, as an example of functional inequivalence, that hot chocolate, considered by Europeans and Americans as an evening drink, is primarily consumed by Latin Americans in the morning. Thus, testing a sales message for hot chocolate in Europe for cross-compatibility in South America via the survey method would yield functional inequivalence; the two cultures use the product differently.

The other type of data incompatibility is conceptual inequivalence, which is when different cultures have a completely different interperetation of ideas. Citing again from the text, the word "family" generally refers to the nuclear family in the USA, whereas in Mexico it connotes the extended family, and in Japan it often refers to long-dead ancestors.

Undoubtedly, technology has made research easier and cheaper to conduct than ever before. Through the internet, marketing departments conduct passive research, relying on web surfers to answer suvey questiong when they visit the appropriate page. Researchers have instant access to secondary data without setting foot in a library or calling a consulate. Direct internet contact with resellers and potential customers also allows the remote gathering of primary data as well. As an example, visit the website of the Rochester Democrat and Chronicle, which sometimes prompts readers to enter their age, gender, and zip code before displaying articles.

These advances erode, however, when researching developing markets. In the US, Europe and Japan, a household without an internet connection is almost the exception rather than the norm. In Africa, however, there might be one internet connection for 1,000 or more people. Online surveys are of no use when the intended respondents lack the ability or literacy to answer them.

Still, Marketers are confident that the Internet will be the preferred medium of information gathering for the future, especially since developing nations are wiring up at an ever increasing rate.

Control of research
Just as the control of creative strategy can be centralized, decentralized, or coordinated between central and regional, so can market research. In a centralized system, a hedquarters handles all research tasks for each market, whereas in a decentralized approach, research for a particular nation is handled at the branch level.

The primary benefit of centralized research control is that it allows for maximum comparability of data, since all research design is handled and interpreted at the headquarters. On the downside, it is possible for a remote central research office not to take local factors into consideration, which could open flaws in the marketing strategy despite all decisions being based on sound quantitative data.

The benefit of decentralized research is that those local idiosyncrasies do not get ignored, and differentiations can be charted even with product usage in neighboring countries, such as Austria and Germany, that share a common language and, on the surface, a common culture. This is a good methodology for firms who are completely unfamiliar with the new markets they are studying.

A coordinated approach has a central research headquarters relying on the data collected or interpreted by regional offices, yet still conducting quantitative primary research from the central site.

Now that we've outlined the basic parameters within which an international advertising effort exists, it's possible to look at the actual strategy decisions marketers use. It all starts out with an issue previously touched upon in the text: the question of standardization.

Proponents of standardization take the viewpoint that consumers around the globe are growing more alike in their wants and needs. Also, product life cycles, from launch to discontinuance, are increasingly short. For products produced under this lightning time-to-market pace and short life cycle, standardization offers a fast, ideally universally effective marketing channel in multiple countries around the world.

This is often the approach taken with personal electronics, such as Apple Computers. As with all computer companies, Apple must stay on the cutting edge of processor speed, operating system functionality, and many other aspects of the relentless pace of technology. Their modern, usability-oriented design ethic- the "urban chic" that has become the hallmark of the Apple brand- also demands constant revisions of their computers' physical design.


Apple iMac circa 2001

Apple iMac circa 2003

Apple iMac circa 2004

The relentless product life cycle may not allow sufficient time to tailor campaigns for the nuances in taste of each nation in which the product is sold.


Mac ad running in the USA



the same ad for the German market

Ultimately, the text cites high-status products that can be marketed with an image campaign (the example used is Levi Strauss Jeans), high-tech products (such as the aforementioned Apple computers), and products that capitalize on favorable nationalism (BMWs epitomize German engineering... Stolichnaya Vodka comes from Russia, the quintessential vodka nation).

I would add that the airline industry offers potential for standardization. In fact, it practically demands it. Airlines that are trusted to transport business and leisure passengers all over the world must transmit the values of safety, efficiency, economy and (usually)comfort to passengers in numerous countries who all want the same thing. It is one of the more homogenous markets in which to operate.

Also discussed is when specialization of advertising is the smarter strategy. An example provided by the text is L'Oreal skin care products. The company attempted to use a standardized approach to sell its cosmetics to people of wildly varying skin tones throughout the world. Once localized control was adopted, flat sales climbed into profitability.

Specialization might be a better option when selling in countries with different media regulations or delivery systems, where people have different physical characteristics, if the same product is sold under multiple brand names in different countries, or if the target markets are in different stages of development.

When it comes to execution, the text talks about advertising appeals- which "must be consistent with the values and tastes of the target audience. Some cultures are more resistant to foreign-produced advertisements (remember those goofy Mentos commercials?). The people in some nations, like Japan, find much more appeal in indirect messages- the "soft sell." Some cultures feel that approaches which work very well in the USA, like comparison selling, are disparaging to the competition and insulting to the intelligence of the viewer, who can educate her or himself as to what is best. Sex appeal sells well in Western Europe, Canada, and the USA, but fares poorly in Middle Eastern countries.

Some features seem to cross cultures in terms of advertising appeal. the phrases "New" and "Improved" are universal, as are other terms that increase the wow factor of an ad. Everyone wants something better or novel. Basic themes like hunger, motherhood, and affection are universal as well. (made in the USA).

Also considered in the text to be universal are advertisements based on the country of origin of a product. Whether it's an appeal to patriotism, an appeal to the stereotpical superiority of products in a particular category from a particular nation (German cars, Swiss watches, etc) or an appeal to an ideal that is widely heald about a nation (Australian friendliness in Outback Steak House ads, The tropical beaches in Corona Beer commercials).

Ads that demonstrate the product, utliize sports or cultural heroes, and the lifestyle benefits of consuming that product are also universal in cultural appeal.

The converse of universal appeal is culture-bound appeal. How a particular culture views sex, the role of women, religion, and other factors influences what advertising strategy will be effective within that culture. A frequent criticism of large western advertising agencies is that, in blitzing out standardized advertising messages, they actually start to change how individuals behave within their own cultures, effectively homogenizing the world.

Finally, we must discuss the methods of advertising communication used a part of the particular strategy. In countries with high literacy, avertising copy may be more effective than countries where illiteracy is common. In those nations, strong graphic images and visual metaphors could reach a greater number of people.

Regarding copy, it goes without saying that translation is crucial. Literal translation from language to language does not work. Native speakers are necessary to transmit the sentiment and the message, using the verbiage most apropriate for the new language. Also, since language is fluid and malleable, any 'hip slang' must be carefully monitored for obsolescence.

There is a great deal of room for creativity within this framework. The text has charts and tables listing industry awards and their winners. Personally, this is the least savory part of the industry to me, as the entire ad game seems to be a bunch of guys in black turtlenecks patting each other (and themselves) on the back. I think, with all the Clios and Cannes Awards, advertising agencies sometimes forget they are marketing to consumers and not themselves or each other.

Summary- Chapter V

Chapter V summary
Coordinating and controlling international advertising
A company’s strategic decisions on how to implement and oversee its international advertising strategy can be cruicial to the ultimate success or failure of their marketing endeavors. The advantages of having the right product, at the right price, with the correct strategy for marketing can be nullified by the wrong choices in administrating the strategic plan. Therefore, it is important that companies make informed choices about the agencies they select, as well as the infrastructure those agencies will use to market the product.

One of the primary decisions takes us back to chapter 2 in the text: Will the control of a product’s advertising be centralized or decentralized? In other words, will a global approach be taken, using a standardized marketing message in all the countries in which a product is sold, or will the strategy be to decentralize, allowing local managers or agencies leeway to tailor the message to fit the characteristics of individual populations?

The answer may hearken back to the product itself; is it going to be standardized in all the markets in which it is sold, as may be the case with consumer electronics, or will it be tailored to fit the tastes and requirements of different environments, as with McDonald’s menu items?

Also, a centralized marketing strategy may be best suited to selling in markets with similar characteristics as the product’s purveyor’s national market. Sony LCD televisions, for example, are high-end luxury items sold primarily throughout the developed world: Europe, Japan, and the USA. Buyers in these nations share many characteristics. They are more affluent, they have more time for self actualization/recreational pursuits as opposed to survival and security pursuits, and they have a greater choice of what to watch than folks in developing countries. In these respects, markets in Japan, France, and Omaha, Nebraska are quite similar. The text frequently quotes Theodore Leavitt of Harvard Business School’s statement that technology has made culture-based preferences a vestige of the past, and everone basically wants the same stuff, so a centralized approach would be more successful.

A less central approach (either with a cenralized decision-making process but local control over day-to day advertising issues or through a completely local-level decision-making process) might be preferred when marketing to a specific segment of a market’s population, such as targeting a particular ethnic group. The thinking is that an agency with experience selling to that group is more attuned to the things that trigger buying decisions among that population. As such, decentralization can prevent entire subsets of a population from missing the message, or reacting to it in a negative manner. The text cites both Welch foods and Ikea as companies that approach their advertising in a nation-by-nation manner.

A company may select its agency or agencies based on their global reach. It has long been the trend for advertising agencies to conglomerate, buying each other up and growing into international behemoths. This is necessary for these agencies to properly do business in an increasingly globalized environment. These full-service agencies can offer complete marketing services under one roof, worldwide, through their various subsidiary companies. This may, however, stifle creativity and originality of approach, which is something from which a niche product or company could benefit. The size and prominence of certain key brands within the agency’s portfolio may cause other accounts to be deprioritized, especially if they may compete with another brand within a mega-agency’s vast number of subsidiary agencies.

Using a number of smaller agencies indigenous to the countries in which the product will be marketed may lead to a better connection between produc and consumer, as the specialized knowledge of the individual creative teams may give them a superior ability to tailor marketing messages to their unique populations, although this approach can cause innumerable challenges to coordination and brand/image changes.

A third approach is to create an in-house advertising agency, in which creative services and market research are handled by the company actually selling the product. This keeps advertising costs down, but perhaps at the cost of not having the overall experience to maximize sales potential in overseas markets.

Ultimately, the decisions of control and coordination should be made on a product/market level, not as a matter of grand policy. Using the right mix of centralization and localization, and picking the company best-equipped for the marketing job at hand, seems to be the key for successfully advertising on an international scale.

Summary, Chapter 4

Chapter IV summary
The Cultural Environment
The external factors that affect a product’s success in a foreign country, such as economic or political conditions, can play a large part in determining consumers’ ability to purchase. However, they do not affect a customer’s desire for or understanding of the need for a product. In order to create that desire, and to position the product as a solution to particular wants or needs, it must be marketed in sync with purchasers’ personal and societal values and behavioral norms; it must be presented in tune with the buyer’s culture.

The term ‘culture’ is nebulous. A culture does not necessarily begin and end at a nation’s borders, and cultures can also have subcultures to which a savvy marketer can effectively sell an appropriate niche product. For the most part, however, it’s important for marketers to determine the common denominators within subcultures and market to those parameters. Of course, for a product sold in more than one country, there are several hurdles to overcome.

The most obvious of those hurdles is language. Not only must a product be advertised in a language the residents of a nation can understand, but the idioms of speech must be taken into account. The annals of advertising are filled with stories about products like Coca-Cola, the slogan of which, ‘Coke Adds Life,’ was read as ‘Coke Brings Your Ancestores Back from the Dead’ in Japan. Even between two nations that share the same language, idomatic speech can produce wildly different meanings for the same word. Suffice it to say, "Fanny Farmer" candies would not have sold well to the mainstream in the United Kingdom.

But successfully marketing to a different culture involves more than just translating one’s tagline into appropriate idiomatic speech. It starts with the understanding of the concept of culture itself, rather clumsily defined by E.B. Taylor as “a complex whole, which includes knowledge, beleifs, art, morals, law, custom, and any other capabilities and habits acquired by individuals as members of a society.” The marketing team must develop an understanding of how the people of a culture see themselves: How they speak, how they view masculine and feminine roles, the significance of religion in their lives and society, how they work with time, etc.

Also, nonverbal communication must be taken into account. According to the text, estimations of up to 70% of the communication between two persons of the same culture is nonverbal. This deeper layer of communication could be vital when planning a television commercial. Symbolism is also contextual within a culture. Certain colors, gestures, objects or societal norms can make the difference between a successful campaign or a disappointing one.

Obviously, then, culture is a huge factor of consumer behavior, affecting who, what, why and how much consumers buy.

A different approach would be made in countries, such as Japan where the primary buyers for families are female, than the USA, where purchase decisions are more equalized between genders. Also, the text cites "Generation Y," the burgeoning $200 billion-plus youth market in the USA. This demographic would be much smaller in a developing country.

The text highlights a print advertisement for beef, to which Americans and Canadians would say "mmmmm....beeeef." However, the point is made that, while Americans may eat 100 pounds of beef per capita each year, in most other nations consumption is minimal. In the same vein, pickup trucks are everywhere in the USA, but in the UK, there are almost none, certainly not the full-size behemoths we buy to tow our boats and trailers. Those that ply Britains narrow roads are mostly owned by companies and municipalities as work vehicles.

Maslow's famous heirarchy of needs is referenced as an example of why customers buy. Where a consumer is in the heirarchy determines his or her purchase priorities. A person in a developing or politically unstable nation might be concerned with physiological and safety needs, such as acquiring enough food, adequate shelter, and protection from banditry, instead of self-actualization needs like Pilates classes and a second Laptop. From a marketer's perspective, Even though there might be a segment of the population that transcends this model, the needs of a nation's markets are closely associated with the level of a country's development.



The shopping habits of a suburban American also differ from people overseas. Whereas for residents of the USA, a weekly trip to the supermarket and a carload of assorted groceries, all purchased at the same place, is the norm, it would be more typical for a French person to make daily trips to the bakery, the butcher shop, the cheese shop, the greengrocer, and the wine store. The French place a different priority on the freshness and quality of their meals than American consumers.

Also, space in European homes comes at a greater premium. There is usually less storage space, and more emphasis is placed on environmental concerns and the avoidance of excess waste. The Miele brand washing machine pictured below is typical for a German house. The dimensions are listed as 85 x 59.5 x 63.4 cm (33.5" x 23.4" x 25")



Compare that to a middle-of-the-road American Whirlpool washing machine, at 42" X 28" X 27."



The size of the American machine would likely preclude its successful sales in a European country, and indeed Whirlpool makes a smaller line of machines specifically for sale in those nations.

A quick case-study of marketing with cultural differences in mind

These three television commercials for Guinness beer illustrate the different approaches used to present a message in line with the culture of the respective nations. The first is from Ireland, where Guinness is iconic.



The second, from the USA, uses Irish stereotypes to gently poke fun at their culture.



And the third, from Uruguay, uses samba music and imagery to wordlessly convey the message and motivation.



Would these ads work if the cultures were switched around? How would Irish consumers feel about seeing themselves stereotyped, riverdance-style? Would an American consumer think to link dark, thick, heavy-tasting Guinness with a tropical party?