Onkvisit S., Shaw J. International Marketing: Analysis and Strategy

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The third principle requires that the sender

create a message that arouses the receiver’s need and

that suggests a particular action which will enable

the receiver to achieve a desired goal. If the sug-

gested action results in several goals being realized

simultaneously, the potency of the message corre-

spondingly increases. An advertiser should thus

identify relevant needs and motives. Motives can

differ greatly among countries, even when the same

product is involved. Consider the automobile.

American car buyers usually replace their automo-

biles every few years, and styling is important

to them. A typical British car owner, however, is

more likely to view the purchase as a long-term

commitment, even though this perspective is also

changing. For the Briton, the motive of functions in

terms of durability outweighs the emotional appeal

of styling.

The last principle suggests that the message must

gain control of the receiver’s behavior at the right

place and time. The message should offer a well-

deﬁned path to reach the goal. If the purchaser is

placed in a situation requiring action, the chances

are increased that the buyer will take the suggested

action. For example, Tokyo Toyopet, a division of

Toyota, has done remarkably well by adhering to this

principle. Its Toyota salesperson contacts a potential

new car buyer immediately after the latter’s car has

completed its “shaken,” a mandatory inspection in

Japan for a three-year old automobile.The timing is

effective because this is when the car owner is most

likely to think about trading in the old vehicle for a

new one.

Inﬁniti’s communication campaign to introduce

the brand seems to largely contradict the principles

of mass persuasion. Although novel, the promotion

campaign was severely criticized for failing to

directly communicate the features and beneﬁts of

the Inﬁniti brand. The introductory TV spots and

magazine advertisements did not show the product

(i.e., the car). Instead, they showed pictures of

rocks, trees, hay, and so on.The TV spots included

“Distant Leaves,” “Misty Tree,” “Delicate Branches,”

“Flock of Geese,” and “Summer Storm.” Inﬁniti

dealers were also upset.

PROMOTION MIX

To communicate with and inﬂuence customers,

several promotional tools are available. Advertising

is usually the most visible component of promotion,

but it is not the only component. The promotion

mix also consists of three other distinct but inter-

related activities: personal selling, publicity, and

sales promotion.

The four promotional components are not mutu-

ally exclusive, and it can be difﬁcult at times

to determine which one of the four activities a

particular promotional tool may be. Consider the

common trade fair. Promotion for a trade fair may

be viewed as advertising because a fair sponsor, as

well as participating companies, generally uses

direct mail and newspapers to advertise the event.

Since the media receive both advertising orders and

news releases, they may be willing to provide free

publicity for the fair as well. Furthermore, stafﬁng

at a display booth is necessary, and there will be

plenty of opportunity for a company’s representa-

tive to use personal selling to make sales. Finally, it

is not uncommon for fair participants to offer free

gifts and special prices during the display, and these

techniques are classiﬁed as sales promotion tools.

This chapter concentrates on personal selling, pub-

licity, and sales promotion.

PERSONAL SELLING

According to the American Marketing Association,

personal selling is an “oral presentation in a conver-

sation with one or more prospective purchasers for

the purpose of making sales.” Personal selling, also

commonly known as salesmanship, is used at every

distribution level. The cost of personal selling is

high. One extreme case is German software maker

SAP, the world’s leader in applications packages for

client-server networks. In the USA, SAP America

has removed the $140,000 annual limit on sales

commissions, making it possible for a salesperson to

earn as much as $2 million a year – more than what

the company’s top German executives make.

In spite of the high cost, personal selling should

be emphasized when certain conditions are met.

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Industrial buying or large-volume purchases,

characterized by a large amount of money being

involved, justiﬁes personal attention. Personal

selling has also proven to be effective when the

market is concentrated or when a salesperson must

develop a measure of conﬁdence in the customer for

the purchase.The effectiveness of personal selling is

also a function of product type. In general, personal

selling works well with high-unit value and infre-

quently purchased products. Such products usually

require a demonstration, are custom-made or ﬁtted

to an individual’s needs, or involve trade-ins.

In the Far East, Asian businesspeople do not like

to discuss business deals with a foreigner who

does not come highly recommended by a mutual

acquaintance. Personal contact is important to

selling in South Korea, not only because of the value

placed on personal relationships but also because

such contact serves to bring the end user in touch

with new processes and equipment. Because

Japanese suppliers often visit their Korean cus-

tomers, US suppliers need to visit Korea to augment

the efforts of the local representative. At the same

time, it is advisable to hold demonstrations, semi-

nars, and exhibitions of their products in Korea.

Note that not all salespersons are directly

involved in selling. So-called missionary salesper-

sons, for example, have the task of educating poten-

tial buyers about product beneﬁts and promotional

campaigns in order to create the goodwill that may

result in subsequent sales. When Foremost ﬁrst

introduced milk and ice cream products to the Thai

market in 1956, the company sent sales representa-

tives (missionary salespersons) to educate people by

giving talks on sanitation and nutrition in schools

and by providing free samples to students.

Personal selling vs. advertising

Personal selling is similar to advertising in the sense

that both aim to create sales and that both must

be understandable, interesting, believable, and

persuasive. However, advertising differs from per-

sonal selling in several aspects. Advertising relies

on a non-personal means of contact and sales

presentation. When compared to advertising, per-

sonal selling commands a much larger share of

aggregate promotional dollars and accounts for

several times more in terms of the number of per-

sonnel. This relationship exists in all countries. In

fact, the abundant labor supply in developing coun-

tries makes it easy and inexpensive to employ sales

personnel. Shoplifting problems also necessitate the

use of personal selling, making self-selection and

self-service relatively rare.

The differences between advertising and per-

sonal selling may also be contrasted in terms of the

communication process.

Advertising is a one-way

communication process that has relatively more

“noise,” whereas personal selling is a two-way com-

munication process with immediate feedback and

relatively less “noise.” Controlling the message is

more difﬁcult in personal selling than in advertising

because salespersons may react to unforeseen situa-

tions in such a way that may differ from the

company’s policy.Yet advertising is usually less per-

suasive because advertisements are prepared in

advance by those with minimal contact with cus-

tomers and because the message must be kept

simple to appeal to a large number of people.

Personal selling, on the other hand, is more ﬂexi-

ble, personal, and powerful.A salesperson can adapt

the message to ﬁt the client at the time of presen-

tation, and stimuli can be presented to appeal to all

ﬁve senses.

Varying quality and style of personal

selling

The quality of personal selling varies widely from

product to product, from employer to employer,

and from one target group to another. In general,

salespersons selling for manufacturers are better

trained and more qualiﬁed than those working for

wholesalers and retailers. In terms of the target

market, salespersons who sell to industrial users are

more likely to be “order getters” and are generally

aggressive, well trained, and well informed. Indus-

trial salespeople, receiving high compensation, must

be capable of mixing easily with top management.

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Those selling to wholesalers, retailers, and con-

sumers have a more routine selling job, and these

salespeople are “order takers” and generally less

aggressive in securing new business. Expensive

products require a higher quality of personal selling

than do low-unit value, high-turnover products.

Personal selling is not viewed as a prestigious

occupation in most countries. It is often taught in

trade schools or vocational schools rather than in

colleges, and thus the quality of personal selling

outside the USA is far from exemplary. In Brazil, for

example, salespeople are not very well trained by

US standards.

Selling styles differ signiﬁcantly. In Japan,

employers are agreeable to the practice of having

salespeople call on their employees at the work-

place. Japanese salespeople sell cars door-to-door.

Subaru went one step further. With its image as a

vehicle for outdoor types, Subaru equipped its

door-to-door salespeople with Sportsman’s Guide

catalogs. Sportsman’s Guide, a US ﬁrm selling a pro-

prietary line of sporting goods and accessories, was

optimistic about this unique distribution channel.

In the USA, salespeople entertain clients at

either breakfast or lunch. Overseas, it is much more

common to meet for entertainment after business

hours and to have sales discussions over dinner or in

a nightclub.After-hours business contacts are much

more important overseas than they are in the

USA. Clients expect attention to be given to social

functions in addition to business functions, includ-

ing golf, drinking, dining, and so on. Potential cus-

tomers expect to be wined and dined extensively.

A salesperson commonly takes customers to bars

and nightclubs for social contact with members

of the opposite sex. Under such circumstances,

salespeople must be prepared to be far more than

order takers.

The personal selling tactic may have to be mod-

iﬁed in some markets. Avon is able to use door-to-

door selling in the USA and Latin America, but it

found that the practice is an anathema in some cul-

tures. Asians, for example, are wary of strangers;

as a result, Avon’s sales representatives stop only at

the homes of friends and relatives. Neighborhood

parties sponsored by Avon are a modiﬁed promo-

tional technique that seems to work well in Asia, and

the technique has been tested in Germany as well.

In France, the prohibition of door-to-door selling

has compelled Avon to shift to direct mail sales.

Personal selling must receive proper support

in terms of training and information. It is difﬁcult

for salespeople to be effective without advertising

support. Advertising creates awareness and helps

make customers more receptive. Tokyo Toyopet’s

advertising, for instance, does not take the form of

direct action advertising. Rather, it tells customers

to be patient and to wait for one of the company’s

salespeople to call. Such advertisements are not

product oriented since the intent is to sell a com-

pany image.These advertisements are employed not

to attract customers to the showroom but to aid the

salespeople’s door-to-door sales activities.

Intercultural negotiation

Successful negotiations require some understanding

of each party’s culture and may also require adoption

of a negotiation strategy that is consistent with the

other party’s cultural system. One strategy is to rely

on stereotyping. It is possible, for example, to use

stereotyped preconceptions to identify the personal-

ity traits of negotiators from different ethnic groups

or countries. Although stereotyping allows an easy

label, it is also risky because generalization may lead

one to believe that members of the group must share

the same traits. These prejudices, if believed, may

affect business negotiations and their outcomes.

International marketers are interested in the

effects of cultural adaptation on intercultural com-

munication. Studies should be conducted to identify

conditions that make it desirable for businesspeople

to adapt their behavior in response to the culture of

the other party.

Motivation

Like other employees, salespeople need to be moti-

vated. In many countries, Western ﬁrms ﬁnd it

difﬁcult to retain and motivate salespeople. The

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PROMOTION STRATEGIES

concept of individual recognition of sales represen-

tatives is at odds with Japan’s team approach to busi-

ness and its aversion to a compensation system that

pays for performance. In Saudi Arabia, where selling

is considered an undesirable occupation, qualiﬁed

local sales representatives are hard to ﬁnd due to a

labor shortage. Because of India’s various languages

and social caste system, it is difﬁcult for sales rep-

resentatives to sell outside their own social level. In

Brazil, the determination of sales force compensa-

tion and product pricing is affected by rampant

inﬂation and national labor laws. It is thus a problem

to pay someone less than the amount paid the

previous year.

Based on a representative sample of the labor

force in seven countries regarding what individuals

seek from working, the two most dominant work

goals are “interesting work” and “good pay,” and

these goals are consistent internationally, across dif-

ferent organizational levels, between the genders

and among different age categories.

Although wage

level has some explanatory value in predicting the

compensation ratio, culture is a predominant factor

that inﬂuences certain compensation patterns.

One

study found that industrial salespeople’s perceptions

of organizational fairness varied across the USA,

Japan, and Korea.

Amway (Japan) Ltd., the subsidiary of privately

held Amway Corp., is the corporation’s top over-

seas afﬁliate as well as the ninth most proﬁtable

foreign company in Japan. Amway is able to bypass

local retailers and wholesalers who often demand

enormous markups. Amway does all its direct

selling in homes through some 500,000 distributors

(salespeople). Amway’s cultlike corporate culture

appeals to Japanese who prefer to identify strongly

with their employers.As in the USA, Amway moti-

vates salespeople by offering 30 percent commis-

sions, bonuses, and trips abroad, and its pyramidal

structure generously rewards distributors who

bring new salespeople into their group. Distributors

are attracted by the unusual brand of fraternal cap-

italism as much as by potential earnings.

Avon’s joint venture with the Guangzhou

Cosmetics Factory is the ﬁrst foreign as well as

Chinese company authorized to sell directly to

Chinese consumers. Avon’s concern about Chinese

women’s ability to understand the concept of direct

sales disappeared rapidly when local representatives

told Avon to double the prices and sold one month’s

allocation of cosmetics in ﬁve days. Most represen-

tatives like the self-esteem, independence, and extra

income (commissions).

Certain factors may affect sales performance.

Role conﬂict and role ambiguity have been found to

have deleterious effects on sales personnel in the

USA, Japan, and Korea.To reduce role conﬂict and

ambiguity, a number of techniques may be used:

sales training, training manuals, job descriptions,

written company correspondence, lectures/discus-

sions, case studies, role-playing exercises, training

ﬁlms, and so on.

Telemarketing

Personal selling does not always require a face-to-

face conversation. For instance, personal selling may

be done over the telephone. Although telephone

selling has been in existence for a considerable

period of time, the growth of the direct marketing

ﬁeld has pushed this method of selling to the

forefront. This marketing practice, now known as

telemarketing, has become very popular among

sellers – but not necessarily with consumers, who

feel they are being inundated with such calls.

Because of the effective lobbying of telemarketing

ﬁrms, US lawmakers have been reluctant to pass

laws restricting the use of telemarketing. As part of

the lobbying effort, the ﬁrms pointed out that leg-

islators’ own fund-raising efforts would be impede

by the proposed restrictions. However, the US and

state governments ﬁnally implemented the do-not-

call lists in 2003.

In overseas markets, telemarketing is not as far

developed as it is in the USA.The limited availabil-

ity of telephones for private households is one

problem. The privacy laws are another obstacle.

Cold calling (unsolicited sales calls) is receiving

close scrutiny in the name of consumer protection

and respect for privacy. A statutory cooling off

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PROMOTION STRATEGIES

period may apply to sales closings over the tele-

phone. Germany is even more restrictive. It pro-

hibits cold calls on the grounds of privacy invasion,

and this ban even applies to an insurance salesper-

son’s announcement of a visit.

Expatriate personnel

One controversial subject for which there is no def-

inite solution is the nationality of the salespeople to

be used in a market abroad. Some marketers argue

for the use in a foreign market of expatriate sales-

people, or those from the home country. Others

take the opposite point of view by contending that

the best policy is to use local nationals or those

salespeople who were born in the host country.

According to one study, the higher the interdepen-

dence between a branch ofﬁce and headquarters,

the more US nationals are employed in overseas

operations to manage the inherent uncertainty.

However, though managerial behaviors are related

positively to job performance for managers in the

USA, they were not related to job performance for

American expatriate managers in Hong Kong or job

performance for Hong Kong Chinese managers.

Expatriate salespeople are viewed favorably

because they are already familiar with their

company’s product, technology, history, and poli-

cies.Thus the only kind of preparation they would

need is a knowledge of the foreign market.Yet this

may be the greatest obstacle for the expatriate sales-

person.Whereas some may enjoy the challenge and

adjustment, other expatriate personnel ﬁnd it difﬁ-

cult to cope with a new and unfamiliar business

environment. The failure to understand a foreign

culture and its customs without question will hinder

the effectiveness of an expatriate sales force. British

managers, for instance, have difﬁculty in running

retail stores in the highly competitive US market,

which is characterized by longer shopping hours and

sizing differences.

Not only must an expatriate cope with new

business conditions, but the expatriate’s family

must also share in the burden of making social

adjustments. Life can be difﬁcult both physically and

psychologically for those who are unable to make

the necessary adjustments for an assignment that

requires a lengthy relocation overseas.The expatri-

ate may have second thoughts about accepting such

an assignment, fearing that the distance from head-

quarters may eliminate chances for promotion or

that the company may want to keep him or her

abroad. Moreover, an overseas assignment may not

be easy for American salespeople and their spouses

because they may become frustrated with shopping

for schooling, and the limited entertainment oppor-

tunities. Some may be driven by the boredom and

frustration and may initiate an affair or begin to

drink excessively. It is thus crucial that the person-

nel for overseas assignments be selected carefully. In

fact, their families should also be interviewed to

determine the suitability of their temperament for

an overseas assignment.

An examination of “antecedents of spouse cross-

cultural adjustment to interacting with host country

nationals and to coping with general, foreign

environment” found spouse interaction adjustment

to be positively related with ﬁrms that sought the

spouse’s opinion about the international assign-

ment, the spouse’s self-initiated pre-departure

training, and social support from family and host

nations during the overseas assignment.

Successful expatriates possess certain qualities

that include cultural adaptability, patience, ﬂexibil-

ity, and tolerance for others’ beliefs. One study of

network ties focuses on three characteristics of

international managers – nationality, cultural dis-

tance, and expatriate status. Based on a network

analysis of cross-subsidiary interactions among 457

managers in a multinational corporation, managers

form strong, expressive ties with peers with a

smaller cultural distance and from the same status

group. But in the case of instrumental ties, they are

stronger when peers differ in these background

characteristics.

Expatriates are likely to perform more effec-

tively overseas if they are satisﬁed with their jobs.

According to one study, job autonomy and material

life satisfaction are key predictors for expatriate

turnover tendencies.

According to another study,

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PROMOTION STRATEGIES

job characteristics as well as organization character-

istics contribute signiﬁcantly to expatriate satisfac-

tion. In terms of job characteristics, an expatriate

manager should be given more clarity and auton-

omy. Regarding organization characteristics, it is

important to involve expatriates in the decision-

making process so that the adverse effect of geo-

graphical isolation (and managerial isolation) can be

minimized.

It is thus advisable for a company to

design new job assignments based on past skills and

experiences while opening up opportunities for

future growth and development.

An expatriate’s commitment to the local opera-

tion and the parent company is determined in part

by one’s satisfaction with the host culture.This sat-

isfaction is in turn determined by one’s consumer

experiences. Market alienation, having a negative

effect on satisfaction, can be reduced by participa-

tion in the host marketplace.While cultural know-

ledge is not directly related to one’s satisfaction with

the host culture, it has an indirect impact through

its association with the participation in the host

marketplace.

Despite the problems associated with the use of

expatriate personnel, local workers or the host

country’s own nationals may present another set of

unique problems. Rather than having a multi-

national perspective, they may be identiﬁed more

closely with their home country.They may also not

possess an understanding of the headquarters’ busi-

ness cultures and objectives.Furthermore,they may

be geographically immobile in the sense that they

may prefer staying in their own country rather than

accepting a new position with more responsibilities

abroad. Empirically, however, one study found no

support for the widespread belief that expatriate

personnel are more loyal to the company than host-

country nationals.

In all fairness, some disadvantages of using locals

very likely apply to expatriates as well. More

important is that these criticisms point out the prob-

lem of ethnocentrism. Companies which are truly

multinational realize that good foreign personnel,

though somewhat different in their thinking and

approach, can be valuable and effective employees.

Foreign personnel may also be able to provide

knowledge and information that can be very valu-

able to American companies. Hewlett Packard is

one example of an American multinational company

that owes its success to the use of foreign personnel.

Its European operations are run autonomously by

Europeans. Local pools of technical expertise are

tapped to develop products for worldwide distribu-

tion. New management ideas, such as ﬂexible work-

ing hours and a program to introduce the company

to schoolchildren, were ﬁrst developed in Germany

before being adopted in the USA.

There are several advantages to be gained by an

MNC in using foreign-born native personnel

working in their own country. One advantage is that

the company can avoid political,sensitive,or embar-

rassing situations. Since the government and the

local community undoubtedly prefer that their own

nationals be hired instead of outsiders, the MNC can

avoid charges of exploitation while gaining goodwill

at the same time. Visa’s European organization has

been staffed and directed by Europeans in an effort

to dilute its image as an American company.

Another advantage to be gained is that the

company can compete quite strongly for high-

quality local personnel. An MNC can offer above-

market pay, which may likely be still lower than the

pay scale in the MNC’s home market.This situation

applies to Japan as well.The stigma associated with

the Japanese working for foreign companies has

recently been crumbling. In the past, the Japanese

were reluctant to work for US companies since they

felt that it would be a barrier to promotion. They

were also apprehensive about the role of politics

within the organization. But younger Japanese are

now more internationally oriented and are eager to

join US companies, since these workers resent the

Japanese system of seniority, dedication, and loyalty.

When the host country’s people are employed

locally, expatriate relocation and travel expenses can

be avoided. The costs of keeping expatriates over-

seas can be exorbitant. Cost-of-living adjustments

may equal 80 percent of base salaries. In addition, a

modest house in a Tokyo suburb may cost $11,000

a month. It is not unusual for GM to have to spend

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$750,000 to $1 million on a manager and his or her

family during a three-year stay overseas.

The use of local personnel allows a company

to proceed with its business more quickly since

the adjustment period is eliminated. Language bar-

riers and cultural difﬁculties are minimized. For

example, it is difﬁcult for an American salesperson

to entertain foreign clients without an understand-

ing of the local culture.Without a knowledge of the

local language, even simple or casual interaction

such as telling a joke is a struggle. In Japan, a major-

ity of business is conducted verbally in face-to-face

interaction, whereas in the USA much greater

emphasis is placed on correspondence and report

preparation. Realizing that the American business

culture is different, Ricoh uses American personnel

to run its US operations. Furthermore, Ricoh rec-

ognizes that local nationals, being identiﬁed as

part of the local scene, can be both efﬁcient and

effective since they have business and government

contacts.

One answer to the question of the nationalities

of personnel is that suitability can be determined in

part by the distribution level. Western salespeople

can be used to contact overseas distributors, whole-

salers, and large retailers. This international

channel, however, is impractical at the consumer or

local level. Most Japanese insurance companies and

Avon, for example, use home makers as part-time

salespeople for door-to-door sales. The American

Family Life Assurance Company, likewise, uses no

advertising in Japan but relies on a strong sales

network and a full-time sales force selling group

policies directly to companies.

When personnel are examined in key positions

and at headquarters, usually most American com-

panies have only Americans. In a way, this is under-

standable because of the vast supply of local talent

available to ﬁll such positions, but some American

MNCs are now realizing that a well-trained

American may not be so well trained to work on a

worldwide basis. American Standard has instilled a

stronger global orientation into its corporate deci-

sion-making process by using foreign managers

to run many of its important US operations. Such

heterogeneity provides a company with linguistic

capabilities, exporting know-how, skills in negotiat-

ing with foreign governments, and international

ﬂavor that many US managers lack.

When local personnel are employed, an MNC

must pay attention to the host country’s labor laws.

Such laws can temper the ﬁrm’s decisions with

regard to hiring and ﬁring.This is especially true in

socialist countries. China, for example, has become

a hybrid of capitalism and communism.The hiring

rules there have been relaxed, making it possible for

Chinese entrepreneurs to hire employees. MNCs,

however, have to select employees from those

sent to them by the state.The socialistic system, by

guaranteeing jobs and security and by awarding

bonuses equally among workers with no regard for

performance, hampers efﬁcient operations. As a

result, workers are more concerned with a big

bonus and not very interested in hard work. In any

case, MNCs have recently gained more legal right

to ﬁre lazy or incompetent workers, though that

right has not been extended to domestic enter-

prises. Nevertheless, MNCs should realize that a

worker must be given many chances before that

worker can be ﬁred.

Women tend not to get international assign-

ments. The reasons often offered range from the

reluctance of women or their companies, to preju-

dice against women in foreign countries. One

study found that women and their supervisors had

different views on women’s interest in pursuing

international assignments as well as different expec-

tations concerning the prejudice.Therefore, women

and their supervisors should discuss the issues

openly.

PUBLICITY

The nature of publicity

Publicity is the nonpersonal stimulation of demand

that is not paid for by a sponsor which has released

news to the media. Advertising and publicity are

quite similar in the sense that both require media

for a nonpersonal presentation of the promotional

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PROMOTION STRATEGIES

message. One difference between the two is that,

with publicity, a company has less control over how

the message will be used by the media.Another dif-

ference is that publicity is presumed to be free in

the sense that the media are not paid for presenta-

tion of the message to the public. In practice, a pub-

licity campaign is not cost free because someone

must be assigned to generate the publicity, and there

are several direct and indirect costs. However, the

cost of publicity is minimal when compared to

the beneﬁt.

Publicity offers several advantages. In addition to

the low cost, the material presented is not recog-

nized as paid advertising per se because it occurs in

an editorial setting that makes it appear to have been

generated by approval of the editorial staff. The

material thus has more credibility, and consumers

tend to accept it as news information rather than as

advertising.This perception is particularly useful in

countries where it is difﬁcult to buy commercial

time or advertising space.

Publicity should be used when a company adver-

tises heavily, since advertising increases the likeli-

hood that the media that have been used will

reciprocate by using the company’s news releases.

Publicity is also effective when the editorial content

can inﬂuence purchase, a point proven by Perrier.

Publicity was an important part of Perrier’s mar-

keting program, since the company determined that

it needed third-party endorsement by editors in

news and lifestyle publications and broadcast media.

Perrier therefore invited sixty editors and TV per-

sonnel to the mineral spring in France.The cost of

$100,000 was more than offset by several positive

articles that appeared later – which were worth

several million dollars in publicity. Its other pro-

motional vehicles were those associated with health

and ﬁtness, including marathons, road races, Perrier

golf course openings attended by celebrities, and

Louis Harris’ The Perrier Study: Fitness in America.

There are several methods that may be used to

gain publicity. Such methods include the following:

contribution of prizes; sponsorship of civic activi-

ties; release of news about the company’s product,

plant, and personnel; and announcements of the

company’s promotional campaign, especially with

regard to such sales promotion techniques as games

and contests. Nike was able to overtake Adidas in

the USA with effective publicity and sales promo-

tion campaigns.In addition to asking athletes to help

design shoes, Nike signed professional athletes to

exclusive promotional contracts involving cash, free

shoes, and promotion appearances. Shoes were

given to top college teams, and the company gained

additional exposure when these teams appeared on

TV. Moreover, it sponsored running clinics, sport-

ing events, and women’s pro tennis events.

The management of publicity

Publicity is often viewed as a promotional compo-

nent that is not possible to manage. News releases

to the media may not be used by the media or, if

used, not in the manner intended. In reality, the

problem is not so much that publicity cannot be

managed but that publicity is usually managed in a

haphazard way.

Proper management is required for all publicity

campaigns. Every campaign must ﬁrst have a well-

deﬁned objective. Without a precise objective it is

difﬁcult to coordinate activities, and conﬂicting

messages or items of little news value might be

released. Confusion usually follows.

Much like the other three activities of promotion,

the effectiveness of publicity must be measured.The

effectiveness of publicity is not determined by the

number of news releases or publication space and

air time generated. Similar to advertising, personal

selling, and sales promotion, the effectiveness of

publicity should be measured by sales inquiries and

changes in the attitude or response pattern of the

public.

A person responsible for a publicity campaign

should keep the needs of the media in mind. Any

request for information should be handled promptly

because any requested information is likely to be

used. In most countries, magazines have small edi-

torial budgets and are understaffed. A publicity

placement is more likely to be accepted if it is

submitted in the form that is ready to be used. For

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example, photos and materials that are camera-

ready relieve the publication of budget and time

constraints.

Negative publicity

Some publicity received can be far from favorable

(see Cultural Dimension 14.1 and Marketing Ethics

14.1). R.J. Reynolds encountered this problem in

Japan when it had to disclose that its 16,000 cases

of Winston Lights, used as samples, contained ille-

gally high levels of the dicamba herbicide, higher

than permitted by US law. The poor publicity in

quality-conscious Japan forced the company to call

a press conference to allay fears of health hazards.

Ajinomoto, a brand of monosodium glutamate, has

been able throughout the company’s history to

dispel false rumors. In the 1910s a rumor was

spread that Ajinomoto came from snakes. Another

rumor, circulating in Islamic countries, was that

Ajinomoto was processed from pig bones.

No company wants negative publicity. Without

the proper handling of publicity, a situation may

deteriorate. The adverse publicity generated by its

powdered infant formula became a publicity night-

mare for Nestlé.The company’s idea of marketing a

breast-milk substitute in developing countries to

save babies from disease, malnutrition, and death

backﬁred very badly. Church groups and consumer

groups accused the company of promoting the

product to those who could least afford it or who

were unable to use it properly.The poor handling of

the animosity that developed engaged the company

in a long and costly conﬂict.

Ford and Firestone generated a great deal of

negative publicity related to Ford Explorer and

Firestone tires.

The Ford SUVs and Firestone tires

were linked to more than 1400 accidents and other

mishaps, and almost 100 people died as a result.

Ford blamed the accidents on the Firestone tires and

offered replacement tires to its customers, resulting

in a recall of some 6.5 million tires. Firestone, on

the other hand, put the blame in part on Ford’s user

instructions to underinﬂate the tires. Neither side

appeared to handle the crisis well, and the termina-

tion of the partnership did not help matters.

Much has been learned from the Tylenol case, in

which Johnson & Johnson was able to deal effec-

tively with the contamination that occurred in its

capsules.Marketers should carefully review how the

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Snow Brand Milk Products Co. had serious publicity

problems. Because of a dirty valve at its Osaka plant,

its contaminated low-fat milk caused diarrhea and

vomiting in thousands of residents in western Japan.

The milk was recalled. More disclosures of contami-

nation in other products followed. More people got

sick, and there were more recalls.Soon the Osaka gov-

ernment alleged that Snow Brand recycled and resold

milk products that were returned by stores. The

company’s senior ofﬁcials were heavily criticized for

responding slowly and inadequately to the health

threat.

The Japanese way is for a company to apologize

profusely. Even then, Snow Brand’s scale of apology

was extraordinary.The company sent 2000 employees

to visit the more than 14,000 people who got sick

from consuming the tainted milk.The workers bowed,

apologized, and offered cash compensation.They were

instructed not to talk back. They had to be quiet and

take any insults, while telling the customers that the

customers were absolutely right. Each of the contri-

tion crews took as much as $2000 with them in a day

and brought along gift certiﬁcates, apology letters,

and customer complaint forms. Certainly, it was even

painful for the victims to witness such acts. On the

other hand, the food conglomerate, with $12.1 billion

in annual sales, had plenty at stake.

Source:

“Snow Brand Deploys Some 2,000 Staffers to

Apologize Profusely,”

Asian Wall Street Journal

, July 12,

2000.

CULTURAL DIMENSION 14.1 A SINCERE APOLOGY

company was able to turn the negative publicity

around and regain sympathy and trust. Based on

these experiences, there are several “do’s” and

“don’ts” that should be kept in mind.

To begin with, it is not wise to criticize the media

for reporting unfavorable news.The criticism serves

to alienate the media by inﬂaming the issue and pro-

longing the attention being given to it. It is also not

wise to ignore adverse publicity.This behavior may

give the impression of arrogance, and it wastes

crucial time that could be used to solve the problem

if it is serious.A company should also avoid the “no

comment” response because it conveys the impres-

sion of uncooperativeness and implies guilt. If a full

disclosure is not possible for security reasons, the

company’s spokesperson should say so and ask for

understanding from the media.

When preparing to respond to inquiries about a

newsworthy event, it is crucial to review the facts,

prepare news reports, and perhaps seek professional

assistance. Personnel should be immediately orga-

nized to handle inquiries from consumers and

reporters. Even when the problem is still unclear,

contingency plans should be devised so that per-

sonnel can act quickly. In fact, there should be a

contingency crisis management plan that forces

executives to think in advance about how to deal

with unforeseen crises.

Those companies facing the greatest levels of

industrial and environmental risk are more likely

than others to have crisis communication plans.Such

companies include those in the extractive industries

and food and drug manufacturers. It is thus surpris-

ing that, given the nature of the business, Union

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Product contamination in Belgium was one of the

worst public relations nightmares in Coca-Cola’s

history. The Antwerp plant used substandard carbon

dioxide, causing many Belgians to become sick from

stomach upsets, nausea, and headaches. It was the

ﬁrst time that Coke had to remove its entire inventory

in one country. Luxembourg and the Netherlands also

ordered the recalls. In France, the government sus-

pended sales of Coke from its Dunkirk plant because

some cans were contaminated with a wood chip during

shipping. Coca-Cola quickly sent a team of scientists

to Europe to deal with the crisis.

Coca-Cola’s attempt to acquire Cadbury

Schweppes without seeking clearance from the

European Union did not help the matter. European

regulators were upset, and the deal failed.To improve

its relationships with the EU governments, Coca-

Cola’s new CEO replaced almost all of its senior man-

agement team in Europe with local executives. Out of

ten managers, only one American was retained as a

division president in Europe.

Coca-Cola offered a set of plastic ﬁgurines that

were derived from the Japanese TV series Robocon.

One robot ﬁgurine, Robowaru, had two swastika-like

designs printed on its chest. This Buddhist symbol is

common in Asia and is often confused with the Nazi

swastika. Because of a local Jewish leader’s criticism,

Coca-Cola removed Robowaru.

Coca-Cola also has to contend with religions and

rumors. In 2000, Egyptians received e-mail messages

alleging that Coke’s logo buried “No Mohammed,

No Mecca” in Arabic in the script’s curls. The

company approached Egypt’s mufti, the top religious

authority.The mufti issued a religious edict which con-

cluded that “there was no defamation to the religion

of Islam for near or far.” In addition, those who

spread false claims “will be plunged into hell for 70

autumns.”

Sources:

“Things Aren’t Going Better with Coke,”

Business

Week

, June 28, 1999, 49; “Coke’s Hard Lesson in Crisis

Management,”

Business Week

, July 5, 1999, 102; “Coke

Mending Fences in Europe,”

The Nation

, June 24, 2000;“Is

Douglas Daft the Real Thing?”

Business Week

, December

20, 1999, 44, 46; “Coke Survives Blasphemy Rumors,”

San

José Mercury News

, May 23, 2000; “Coke Pulls Toy with

Swastika-Like Designs,”

San José Mercury News

, May 1,

2003.

MARKETING ETHICS 14.1 THE REAL THING AND THE REAL PROBLEMS