Strategies of Advertising Transferability In Multinational Marketing

By April 1, 1978 February 7th, 2019 Geopolitics & Globalization
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Introduction

The transformation of international trade activities into many large-scale multinational corporations has increased the complexity of managerial decision-making, especially in the areas of marketing and advertising. This Increased complexity is often attributed to (a) the greater diversity of environmental factors, such as cultural, economic and political differences among countries; (b) the lack of information on these environmental factors, especially preferences and habits of people in various countries: and (c) the rapid changes in many of the environmental factors in these countries.

The increased complexity of decisions in the area of advertising management can be described in terms of three action-oriented questions:

  1. Should the multinational product manager position and communicate about his brand the same way In all countries? In other words, should he use the same appeals and target his market the same way as he does in the domestic market?
  2. Should the product manager use the same media (allowing for the constraints of availability) and allocate his budget among media the same way as he does in the domestic market?
  3. Finally, how much should he spend in each country? Should it be proportional to the potential market demand in each country?

The product manager may be tempted to consider extending his domestic advertising strategy to other countries, especially if he has a good track record in the domestic market. There are some fundamental advantages in extending advertising effort in this way. The foremost advantage results from the fact that It is very difficult to generate successful creative appeals and communications on a routine basis. If the manager can, therefore, successfully transfer a good appeal to as many situations and countries as possible, he will save the time and effort of searching for new ideas, appeals and concepts (1). Secondly, the coat of producing separate advertising commercials can be considerably minimized if direct transfer is made: often this cost is a major part of the total advertising budget (7 and 10). Finally, it is always easier to manage a less complex and varied task. The manager can feel more confident, more secure arid often more productive in his own function it there are universal advertising programs across many markets.

On the other hand, the manager is conscious of the real possibility of failure because he knows the salient environmental factors are different and less easily comprehended in foreign markets. Furthermore, he is often unwilling or unable to take the risk of extending his strategy because he knows he has no theory or model for his success In the domestic market. In other words, he knows his advertising strategy works in the domestic market but he cannot explain why it works.

Two opposite schools of thought

The manager is, therefore, laced with a dilemma: Should he extend his advertising strategy or adjust It for each country (13)? Unfortunately, very little systematic empirical research has been done to provide some Bayesian insights. There are two opposing views on this question among advertising agencies and marketing researchers (12).

The first asserts that basic human needs, wants, and expectations today transcend geographical, national and cultural boundaries (2, 3, 11).

This school of thought holds that the desire to be beautiful is universal and that advertising is more effective when it pictures a woman as she would like to be rather than as she is… Most people everywhere, from Argentina to Zanzibar, want a better way of life for themselves and or their families. The intensity of this aspiration varies, not only with the country, but with the segment of a country. But it’s there. (3, p. 18).

This school of thought, therefore, prefers to search for fundamental similarities across segments and countries and capitalize on them by producing universally appealing product themes.

The second school of thought, however, asserts that even though human nature is the same everywhere, a German will always remain a German, and a Frenchman will always remain a Frenchman (8, 9). This school would, therefore, prefer to develop separate, heterogeneous product appeals to capitalize on the differences among customers in different cultures and countries, Its basic argument Is that It Is Impossible to develop a true common denominator in order to communicate universally across cultures.

A variety of successful experiences cited by each school of thought demonstrates that each viewpoint can be useful in sortie specific product situation. To this extent, both schools of thought are situation bound, and lack generalizations useful to the manager. In addition, both schools of thought make certain assumptions about the relevance of environmental factors which seem more and more removed from market realities.

First, aggregate country profiles on cultural, economic and social factors may differ from customer profiles. In other words, while two countries may be very different in cultural and social values, customers for a product class in those countries may be very similar in these values. For example, India end the U.S. may be very different but customers for refrigerators Ire the two countries may have similar values. Reciprocally, while two countries may be very similar, customers living In those two countries may have different values. For example, the U.S. and Canada are similar cultures but the consumption oils number of products in each country is considerably different. Thus what should be compared between two countries is the distribution of customers and potential customers and not the aggregate environmental factors.

Second, one must compare customers in two countries with respect to the specific expectations and criteria people use to choose product types. Thus It is possible that customers in two countries may differ socioeconomically and demographically but may have the same expectations and use the same criteria in judging a given product class. For example, police and detective programs may appeal to very young people in one country while they appeal to older segments of the population in another country.

Finally, It seems more logical to assume that there Is a continuum between complete extension and complete adjustment of advertising in the International context. A successful transfer of advertising function to another country can thus be made by adjustments of varying degree.

A new orientation to advertising transferability

This paper attempts to define a set of guidelines which can suggest whether adjustment of advertising is necessary, and if so, the degree of adjustment necessary to transfer advertising to foreign markets.

The research manager must assess the following three aspects of each country in which the product is likely to be marketed.

  1. The first aspect Is the expectations and criteria people use to evaluate a product class In various countries. In other words, what benefits do people expect to derive from the purchase and consumption of a product class? Considerable evidence suggests that people in different countries look for different benefits in a product class (13. 15). There are several ways to compare product benefits sought In various countries. One relatively simple technique is principal benefit analysis (4). In this research method, a representative sample of people are asked to state in a nondirected fashion the single most Important need or criterion they wish to satisfy when deciding whether to buy a product and what type or brand name to buy. A second measure is a profile of relative importances of various benefits and criteria which a representative sample of people can satisfy by consuming a certain product category (6). Ills then possible to perform a two-group, discriminant analysis between the domestic and a specific foreign market or a multiple group discriminant analysis of the domestic and several foreign markets using either the frequency distributions of different principal benefits sought or the profile of relative importances of a given set of benefits and choice criteria The discriminant analysis or other simpler statistical procedures such as analysis of variance will indicate whether a foreign country Is different from the domestic market with respect to people’s expectations for a specific product.
  2. A second determinant of the strategies of advertising transferability has to do with the mechanics of encoding and decoding symbolic communications. The advertising manager must encode the specific product appeals in pictorial and linguistic representations In order to use the mass media. Encoding and decoding represent both the production and consumption of communication. Clearly, foreign markets will differ in the mechanics of encoding and decoding for several reasons. First, the availability of certain media will vary from country to country. For example, in many European countries, a marketer has no access to television and radio because commercials are not permitted on these med a. Similarly, he may have no access to television in many developing countries. Second, the laws and regulations governing timing, positioning, content, and frequency of advertising also vary from country to country for each specific mass medium. Finally, there are often cross-cultural differences in receptivity and acceptance of commercials. For example, people may react differently to commercials according to their entertainment, information, Intrusion, and manipulation values (14). The encoding-decoding dimension complicates the process of identifying similarities and differences among countries. However, it is possible to break down the encoding function of advertising Into Its mar components with respect to mechanical and creativity aspects such as size, color, Illustrations, readability scores, product benefits, slogans, tunes, humor, etc., and then scale each country according to the degree to which it is bound by the legal constraints of media. Similarity, it is possible to scale each country on the decoding side by profiling people’s beliefs about advertising as an institution and their reactions to its entertainment, Information, manipulation, Intrusion and imitation aspects. Based on the profiles of domestic and foreign markets with respect to these encoding and decoding aspects, it should be possible to determine the extent to which a foreign country is different from the domestic market. Once again, we can use discriminant analysis or simpler statistical procedures to analyze the data.
  3. Finally, the third major determinant of strategies of advertising transferability is what Hall (5) reegies to as the silent languages of each country. This term refers to the culturally different meanings people associate with time, space, things, friends’ hip, and agreements. An understanding of silent languages is very useful for the third element of advertising, the background for the advertising messages. For example, In order to sell beer in different countries, the silent language for friendship in each country must be understood by the creative people to produce a symbolically comparable scene. Similarly, the Northern and the Southern European countries differ significantly in their perspectives about time. An international airline must emphasize

The precision of time and punctuality with Germany, for example, but may Show a more relaxed atmosphere in Spain or Italy. The identification and measurement of silent languages is probably the most difficult part of this adaptation process. While there has been a good start in classifying and defining the silent languages, quantifying them is proving moos difficult. One approach might be to use the Delphi technique and scale various countries on the different types of silent languages, by using a consensus of a group of experts In Cross-Cultural behavioral Sciences. Alternatively, a list of behavior al Indicators of silent languages could be prepared. For example, to measure the silent language of time, we could prepare a behavioral list of punctuality and precision as they relate to work, social interaction, entertainment, shopping, and life-support services such as fire and police departments. Once again, it should be relatively easy. using multivariate techniques, to assess whether a foreign market is different from the domestic market with respect to silent languages.
In summary, the extent to which a product manager can transfer his advertising to foreign markets is a function of three factors: Customers product- specific expectations, the mechanics of encoding and decoding, and the differences in silent languages of various markets. An examination of these factors should enable the advertising manager to decide whether transfer of appeals, media selection and packaging of appeals are each appropriate to a foreign market.

Eight Strategies for transfer of advertising

Working with these three factors, I have created eight different types of extension-adjustment combinations, including complete extension and complete adjustment. The model is simple in that it presumes a dichotomous relationship between two countries: either they are similar of different with respect to each factor, this is illustrated In Figure 1.

  1. Strategy of Complete Extension. Under this strategy, a successful advertising effort is transferred to other countries without any modification either in content or in media choice. This strategy will work if (a) buyer expectations. (b) encoding-decoding process, and (c) silent languages of the countries are all the same. This is the type of multinational universal advertising suggested by the first school of thought discussed earlier.
    Perhaps the strategy of complete extension is not viable on a global basis simply because media availability varies considerably among countries because of differing legal restrictions. However, we do find the strategy of complete extension operating in clusters of countries-among Scandinavian countries, for example, and in North American countries.
  2. Strategy of Symbolic Extension. Successful advertising is extended to other countries with modifications only In the background situations. This strategy will be desirable If the two countries buyer expectations and encoding-decoding processes are the same but their silent languages are different. Only minimal modification must be made, since both the appeal and the medium remain the same. A good example of symbolic extension is the substitution on of a boy for a girl in the Vicks VapoRub commercials when extended to Arab countries, where boys are more the object of parental affection.
    Symbolic extension is perhaps the most common strategy of advertising in multinational business operations. Even In the case of universally accepted products such as Coca Cola, Marlboro cigarettes, and IBM, we find numerous examples of this type of transfer strategy.yy
  3. Strategy of Literal Extension. This strategy is most common when buyer expectations and silent languages are the same but encoding-decoding processes are different. In this strategy, different media may be used or the same medium may be used differently in the foreign country. The message and the background situations, however, remain the same. This strategy is usually developed to differing legal restrictions. For example, television is freely available for commercial messages in the U.S. but it is completely restricted in ScandiInavia. On the other hand, cinema houses are a common medium for advertising in Scandinavia but seldom used in the U.S. The literal extension from one country to another under this situation is minimal, perhaps limited only to language and color fidelity. However, literal extensions are sometimes more extensive when transfer Is from broadcast to print media or vice versa.
  4. Strategy of Symbolic & Literal Extension. It is probably more common to see both symbolic and literal extensions than either of them alone when a multinational corporation is marketing a universal product to the developing countries. This strategy is most useful when the buyer expectations are the same but both the encoding-decoding process arid the silent languages are different.
    A company such as Coca Cola, Max Factor or IBM can conceivably create a worldwide advertising effort with the use of this strategy. In fact, it is this type of multinational universal advertising which would probably be reconinended by the first school of thought discussed earlier.
  5. Strategy of Simple Adjustment. When encoding-decoding processes and silent languages are the same but buyer expectations are different, the strategy of simple adjustment is useful. In this strategy, the medium and the background of advertising remain the same while the product Is promoted on a different appeal. Even within a single country, we often find use of this strategy to appeal to different segments of the market.
    There are a number of instances in multinational marketing in which the same product is promoted on widely different appeals.
    For example, the bicycle is promoted as a commuting vehicle in developing countries as well as in Scandinavia, whereas In the U.S. it has been promoted as a leisure or sports item. Similarly, the lower- priced American cars are promoted as prestigious items In many foreign countries.
    This and the next three strategies are contrary to the viewpoints of the first school of thought, which advocates developing universal common appeals. By the same token, this strategy represents the mildest application of the theory of the second school of thought, which advocates developing differentiated appeals for the same product.
  6. Strategy of Symbolic Adjustment. Under this strategy both content elements, appeals and background, are modified. However, the medium remains the seine because the encoding-decoding process is the same.
    We find numerous examples of this type of transfer of advertising in most developing countries. For example, a number of prepared or processed foods are advertised on the basis of being modern rather than convenient; Instant coffee is one example.
  7. Strategy of Literal Adjustment. When two countries have the same silent languages but differ in terms of customer expectations and encoding-decoding process, the strategy of literal adjustment is desirable, The appeals themselves must be changed and different media chosen to convey them.
    This type of adjustment (with respect to both appeals and media) has often been called for by the second school of thought. There are several case histories in which successful use of this strategy has been made. For example, the advertising efforts of Gillette in Sweden are quite different from its efforts in Greece or in the U.S.: the appeals In Sweden are directed to compete against dry shaving, whereas they are directed toward encouraging salt-shaving in Greece and toward superiority of Gillette compared to other blades in the U.S.
  8. Strategy of Complete Adjustment. This strategy is, of course, the antithesis of the strategy of complete extension. It suggests a completely fresh app roach in a foreign country because customer expectation the encoding-decoding process, and silent languages are presumably different.
    Despite the vehement arguments presented by the second school of thought, my view is that the strategy of complete adjustment is more an exception than the rule. Perhaps it will become more relevant when we increase our multinational activities to Eastern European countries including the U.S.S.R. Several large multinational corporations and advertising agencies still advocate this strategy, but think such convictions are based on business practice rather than firm knowledge of the market realities. We know, of course, that business practice, even successful, is not necessarily right, because marketing successes are still due more to accidents of time, place, and effort than to systematic planning (15).

Summary and conclusions

This paper has attempted to examine critically the present controversy about the strategy of multinational advertising: Should a company follow a universal advertising policy or should it create separate advertising strategies for each country?

I have suggested that a number of problems underlie the present thinking of opposite schools of thought. First, they compare profiles of two or more countries when what should be compared profiles of customers in the two or more countries. Second, the comparative profiles are often drawn from basic environmental factors such as socioeconomic, demographic and cultural aspects which often have very little to do with the expectations of customers about specific product categories. In short, we simply do not know whether a rich, middle-aged, white suburban customer in the U.S. always has markedly different expectations about a specific product than a poor, young, nonwhite city customer in any developing country. Finally, it is more logiest to expect some discrete advertising strategies to fall between the extremes of completely universal advertising and completely differentiated advertising.

This paper suggests that three factors most essential in providing insights into multinational advertising strategy are (1) customer expectations about the product, (2) the mechanics of the encoding-decoding process, and (3) the silent languages of countries in which we have an interest. Specific research procedures have been briefly described to develop profiles of each country on these three factors, and to statistically determine whether countries are different. Finally, based on simple binary classification of each of the three factors, I have proposed eight different strategies of extension and adjustment of advertising when transfer is made from one country to another. These are (1) complete extension; (2) symbolic extension; (3) literal extension; (4) symbolic and literal extension: (5) simple adjustment (6) symbolic adjustment (7) literal adjustment; and (8) complete adjustment. Each strategy has been briefly described with some illustrative examples from current practice of multinational advertising.

References

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