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.