THE GLOCAL APPROACH TO INTERNATIONAL ADVERTISING

The glocal approach to international advertising: ”Glocal” describes how advertisers consider language and culture when tailoring global campaigns to populations around the world – or within the United States.  American consumers prefer foreign-made goods in a number of major product categories; a significant percentage of future growth in marketing and advertising will be more concentrated in the Far East, Middle East, and Latin America as sellers seek new customers for their goods and services. Nowhere is the expansion of global marketing more apparent than in the increase in international advertising spending levels. Among the major challenges is overcoming significant anti-American opinions abroad. The roots of these attitudes are varied, but many are related to the marketing of American products.

• Exploitation: The sense that American companies take more than they give
• Corrupting influence: The view that American brands enhance thinking and behavior that clashes with local customs and debase cultural or religious norms
• Gross insensitivity and arrogance: In many cultures, there is a perception that Americans believe everyone wants to be like them
• Hyper-consumerism: Agencies try to find those shared attitudes which are consistent from country to country but these companies must be sensitive to the distinct differences and pride that consumer’s feelings toward their national and cultural heritage.
• The Multinational Corporation: The basic motivation is to make a profit and expand their customer base.

The fundamental economic model remains the same regardless of the company’s size. Another significant feature of global marketing and advertising is the paradox of a greater ability to communicate across international borders accompanied by growing nationalism and suspicion of outside influences in many countries.  Whatever the reason, a growing sense of isolationism is a factor that the international marketers must weigh with care.

In some cases, isolationism can be resolved in part by greater sensitivity to other cultures, a willingness to learn local customers, and openness to new ideas. Globalization is a hybrid term meaning to adapt global marketing efforts (product and advertising messages) to local markets and cultures. Globalization can develop the creation or distribution of products or services intended for global or trans-regional markets but customized to suit local laws or customs.  It is also be used electronic communication technologies, such as the Internet, to provide local messages on a global or trans-regional basis.

Glocalization seeks to emphasize the belief that international sales of a product are more likely to succeed when companies adopt the product and/or promotion specifically to a particular local. For example, Nokia launched the “kosher phone” for Orthodox Jews in Israel, and McDonald’s adjusts their menu according to local food habits.

Localized market strategies is good business and good corporate citizenship

A greater sense of local country traditions may be more important than business expertise, and even the most astute marketers sometimes misunderstand local customs. For example, Wal-Mart in German and South Korea are for those people that are one-stop, quick-shoppers.

The global economy will continue to grow, fueled by the emergence of middle-class societies in an increasing number of countries. In addition, communication technology is permitting advertisers to reach prospective buyers.  A growing global demand and a rising standard of living will combine to make advertising more prevalent worldwide.

China will become a leading global market.  For many years, China has been known for its exports rather than its imports, but today, China is recognized for its potential as a growth market because of its size and the capacity of its growing middle class to buy goods. However, marketers have been warned to approach the market with caution because China is a very diverse as a heterogeneous market. For example, advertising within China has been compared to global marketing because of its more than 22 providences, 5 time zones, and almost 300 cities with populations greater than 1 million. As more companies around the world seek growth opportunities, entry into the Chinese domestic market will become more attractive.

A necessary element in the expansion of global business activity has been the growth of communication technology, particularly in developing regions. The introduction of satellite TV brought the possibility of reaching the majority of the world’s population with information, entertainment, and advertising. Business could expand much faster and efficiently. As impressive as the satellite is, it pales in comparison to the distribution and usage of Internet technology such as social media.

No communication technology has grown at the rate of the internet (1.6 billion people use). The potential for future growth is outside the United States and Europe. The key to successful global marketing is finding those common appeals that will work on a universal basis (a mother’s love for her child).

International legal issues and marketers face the problem of country-to-country variances in matters such as privacy and legal and regulatory standards. Online marketers must be aware that regulations differ widely from country to country. Internet promotions sent to an international audience should provide the opportunity to opt out, give honest and credible information, prohibit the use of randomly generated addresses, and set standards to prevent relaying email from computers with authorization.

America no longer dominates global commerce. It is difficult to develop rigid guidelines for global commerce because each company faces unique issues and deals with them in a variety of ways. Traditionally, a major failing of American companies going abroad (especially those with little multinational experience) has been treating a market as if consumers were homogeneous in terms of demography and product preference based on a lack of research and appalling ignorance of local cultures and traditions.

Global Marketing is a term that denotes the use of advertising and marketing strategies on an international basis. A company should adopt a single advertising and marketing strategy throughout the world where the product development, advertising themes and media, distribution channels, and target market are identical from one country to another.  See Open Happiness campaign from Coke. 

European Union (EU) is the developing economic integration of Europe, potentially a single market of some 500 million consumers in 2010.  The North American Free Trade Agreement (NAFTA) is a treaty designed to eliminate trade barriers among the US, Mexico, and Canada; some see this as being anti-environmental and exploitative of workers and small farmers. In developing a successful multinational marketing organization, management, advertising execution, and sensitivity must be addressed. 

• Management: consolidating strategic management decisions at corporate headquarters and giving local managers flexibility to develop specific tactics within these general principles. A way for management to tackle the issue of creating a branding or advertising theme that can be adapted globally is to look at brands as an umbrella under which a number of related products can be marketed rather than treating each brand as a unique product. The execution of international marketing and advertising is divided into 2 camps: Agencies that are willing to tolerate dealing with a number of local agencies, or efficiencies of centralized control employing a few agencies are worth the potential loss of local character in advertising. Companies usually develop a management style that integrates both of these approaches.
• Advertising execution: international advertising and marketing strategy must adapt in some way to almost every country it enters. Problems such as language differences, media research and usage, and cultural considerations are the most often frequently seen.  It can be argued that the misapplication of global marketing places the well being of the firm ahead of the consumer.  Global marketing involves a number of steps requiring decisions about both products and marketing strategy. The following are some situations that are executed:

1. Export both the product and the advertising to other countries
2. Adapt a product and marketing plan exclusively for the international market or large geographical area
3. Export the product, but change the name
4. Keep the brand name and advertising strategy, but adapt the product country by country
5. Keep the brand name and product, but adapt the advertising in each country (one of the more common strategies)
6. Adapt both the product and the advertising to each country (the most expensive)

• Sensitivity: in recent years, multinational businesses have had to deal with numerous complaints about their operations in developing countries. Even corporations acknowledge that there is a fine line between opening new markets for their products and exploitation. More companies are demonstrating that they understand that there is an important balance to be reached between maximizing sales and profits and being a responsible marketer.

The formulation of joint ventures in the 1970s recognized the growing expertise of local advertising talent and the fact that around the world many overseas agencies were providing client services on par with major American agencies. The most significant change in international advertising on the agency side is the growing trend for clients to bring much of the marketing communication function in-house. The most significant result of this change is that multinational companies are now calling on small agencies for creative work to create multinational advertising agencies.

Advertising revenue in the US accounts for approximately 40 % of the world total, however, much of this advertising is placed by foreign-owned agencies. The primary motivation for marketers in a number of regions is to offer more growth potential in other countries than the more mature US and Western Europe economies.

The effects of integrated marketing communication on worldwide agencies have left marketers much more interested in reaching consumers buy the most effective venue rather than pigeonholing their marketing communication into artificial categories of advertising and promotion, and have moved toward the decentralization of agencies. Many major multinational marketers have opted to use a number of smaller agencies rather than 1 or 2 large ones for their brands (more evident on the creative side). This provides more choice for the client and it promotes interagency competition. The downside of using a multi-agency approach is the problem of keeping the brand image and positioning consistent, and there are potential difficulties with management control of diverse voices.

Research and the Multinational Consumer is changing relationships between international agencies and clients most apparently found in market research. Research for multinational brands is one of the primary areas in which centralization works far better and offers efficiencies in both cost and reliability.  Marketing translation is the process of adopting a general marketing plan to multinational environments. A vital element in the translation process is the brand audit which attempts to define what a brand means to consumers worldwide, and then develop market strategies that will enhance the brand’s potential. Regardless of the function – creative, media, or research – agencies face problems in meeting the demands of clients.  They must accommodate the original structure of their clients.  What is needed for account management often differs from one client to another so some agencies find they need different management organizations for each client.  Agencies must also figure out how to manage centrally and communicate locally – must translate broad client marketing strategies to the level of the individual customer in each country they serve.

The Multinational Advertising plan:  all advertising begins with sound planning and adherence to basic marketing strategy. All forms of marketing communication should be coordinated and integrated rather than presented as a series of unrelated advertising messages. There are two areas of primary concern to international agencies and their clients

1. Creative and cultural considerations: advertisers can no longer introduce their products and depend on latent demand for sales and profits; they must look at the social and cultural implications of their advertising. Successful creative execution begins with an in-depth awareness of a country’s culture, customs, and buying habits.
2. Media planning from a global perspective: the media function has suffered from three primary problems in international advertising:
   1. Media availability and/or usage levels
   2. Legal prohibitions – some of the more general restrictions common to advertising regulators throughout the world are: comparative advertising, advertising to children, internet advertising, standards of truth
   3. The lack of reliable audience research: Rapid expansion of efficient global communication and the expansion of global retailers have dramatically improved the ability of advertisers to reach target markets.

Advertising and Ethnic Diversity in the United States is a huge factor to take into consideration.  More than 19% of US residents prefer a language other than English when at home. The task of marketing to a diverse population is made can be difficult.  With a Majority-minority transition, the marketplace is changing more quickly than many companies can adapt and the ethnic makeup is constantly evolving.  A race is more difficult to determine.  For example, the 2000 census had almost 7 million respondents list more than one racial background.  Finally, Internet and technology allow more immigrants to stay connected with their family and homeland, making assimilation and acculturation a longer process.

A Multicultural market power for companies is not enough to simply identify ethnic market segments, they must relate to them as well.  Companies generally give greater attention to the Hispanic market than either the African American or Asian American for two reasons: because of the rate of assimilation as lower and the language differences.  Even after Hispanics become fluent in English, they still use Spanish on a frequent basis.  How advertisers deal with U.S. diversity is a matter of sensitivity and profitability. Language does not define how a person regards his or her cultural roots – even Hispanics who speak little or no Spanish are as likely to have strong values in the Hispanic community as those who speak Spanish. The emergence of value-driven, as contrasted to language-driven, marketing strategy is a primary change in the strategy and execution of ethnic marketing. Marketers are facing a dilemma because, on one hand, firms know they must acknowledge consumer diversity in order to profitably market their products, but on the other hand, there is a growing acceptance of diverse cultures that suggests the future will be one of constant borrowing from a number of cultural identities.