Accidental advertising campaigns
Intel, the world's leading chip-maker, got into the business of building global brands almost by accident.
For Intel, the lights went on in 1989. An advertising campaign aimed at getting computer manufacturers to change to its latest processor, the 386, had the surprising side effect of persuading consumers to ask for 386-based computers.
"At the time," says Dennis Carter, Intel vice-president and director of marketing, "I didn't really know what a brand was. But it became evident that we had created a brand and that it made a difference in consumers' purchase plans."
The next step was to brand not merely one product but the whole range, using the now-familiar "Intel inside" logo. Intel launched the campaign in 1991 with its first "cooperative advertising" programme, offering to share the costs of advertising with computer manufacturers that used Intel chips.
Soon after came the first "Intel inside" TV commercial - a journey through the inside of a personal computer, ending up at the microprocessor with Intel's logo. It had become the first semiconductor company to sell its product to consumers as though it were a new cola.
Intel initially tailored its advertising to different markets. In Japan, for example, the logo read "Intel in it" but was abandoned when the company found the "Intel inside" brand was better recognised because of information from the US. "This really drove home the idea that the PC market is the same everywhere in the world," says Mr Carter.
Since then, its logo has appeared in more than $3.4 billion (£2.1 billion) worth of advertising - including spending by PC manufacturers, according to Intel.
From the Financial Times
(11) Winning word-of-mouth approval: teenager marketing
Bethan Huttonon how companies stay one step ahead of Japan's materialistic youth
The natural habitat of Japanese teenagers is a small area of central Tokyo between Shibuya and Harajuku stations which is full of boutiques and music shops. At weekends, teenagers from the city and the surrounding provinces go there to spot the latest street fashions.
The area is also a magnet for anyone researching or selling to the teenage market: fashion and cosmetics companies, record producers, editors of young fashion magazines, soft drink and snack promoters, and makers of games and gadgets.
One such company was Bandai, the toy company responsible for Tamagotchi, the egg-shaped, pocket-sized virtual pet which swept the world in the late 1990s. Tamagotchi's first public appearance was in a test marketing exercise on the streets of Shibuya.
The schoolgirls who saw it were so impressed they told all their friends, and the first few batches of Tamagotchi to hit the shops sold out immediately. Such is the power of 'kuchikomi', or word of mouth.
Advertisers everywhere know that personal recommendation carries great weight. Normally, word-of-mouth promotion is free, but impossible to arrange. In Japan, it can be arranged - at a price.
There are agencies with hundreds of teenagers on their books who receive new products and tell their friends about them; others are paid to queue up for the launch of a new product or opening of a new store, creating an artificial 'buzz' about it.
Halfway between Shibuya and Harajuku is the office of Hiroaki Morita, who set up Teens Network Ship on leaving school nine years ago. The agency is the longest-established specialist in the teenage market, and often uses informal, kuchikomi-style marketing methods. It has a register of 2,000 senior high school pupils in the Tokyo area, and is now expanding nationally.
As Mr Morita describes it, the logic is simple: selected teenagers are given information or samples of a new product. Feeling superior for knowing about something ahead of the crowd, they tell on average 50 of their friends and classmates about their 'discovery', so that with a core group of 1,000, word can spread to 50,000 or more.
Information spreads more rapidly among the 15 to 18 age group than at any other life stage, Mr Morita says. For the three years at senior high school, they spend eight hours a day with the same 50 classmates, creating an exceptionally tight social network.
From the Financial Times
Global Marketing
There are some products that can be marketed around the globe without much variation in the marketing strategy or ad campaign. These are usually durable goods that vary little between markets (e.g., machine parts) or flagship brands that are known across borders. One example of such a brand is Coca-Cola. Coke uses the same strategy from country to country and it often uses the same commercials, just translating them into different languages. Other products that have standardized marketing campaigns include Unilever detergents, Marlboro cigarettes, Perrier water, Kellogg's Frosted Flakes, Pond's skin creams, Ajax cleaners, Canada Dry mixers, Exxon oil, Levi's blue jeans, and British Airways. This trend toward standardized marketing is growing.
Reasons
There are several reasons why companies are turning to global marketing. First of all, it is less expensive. It saves time and money if a company only needs to translate its advertisements in different markets. Second, a unified market is growing across country borders. This market is created in part by global media, such as Rupert Murdoch's Sky Channel, Ted Turner's TBS channel, CNN, and Music Box and MTV, which are both music video channels. These international channels show the same programs everywhere. A new generation of consumers follows the same trends whether they live in Sweden or Colombia. Third, as consumers increase their international travel, companies want them to recognize their products across country lines. As the world gets smaller, companies try to maintain brand consistency.
Obstacles
There are, however, obstacles to the global strategy. Some of the obstacles relate to the products themselves. Certain products, such as unprocessed foods, are difficult to market through a standardized approach. People don't change eating habits readily. Companies usually need to use local strategies for this kind of product. Other obstacles relate to the ad campaigns. Some countries limit or altogether prohibit commercials on TV. A company that depends on a standardized TV ad may have to adapt its ad to other media in these countries. Also many countries require local participation in advertisements so that often ads must be remade locally. Countries also vary on what they consider acceptable advertising material. In the United States and Asia, partial nudity in general advertising is not acceptable; in western Europe it is. Finally, some countries prohibit advertisements that do not reflect local culture, as they fear colonization of the local culture.
(13) In praise of the TV commercial
by John Hegarty,creative director of Bartle Bogle Hegarty, an advertising agency
Imagine for a moment you are the marketing and sales director of a large company. Achieving your sales targets is giving you sleepless nights. The company's share price is under pressure, the board is getting nervous, City institutions are questioning the company's investment policy.
How can you generate extra sales quickly and effectively through your consumer base, and expand your potential market? Suddenly, I appear. I have invented a thing called the television commercial'.
It is a new and unique way of talking to consumers. Between popular programmes, I will sell you slots of time - anything up to 60 seconds. I will even negotiate for you the whole break, so no one else can compete with you.
Within this spot you can say whatever you like in whatever form you like. You control the dialogue, presenting your product or service any way you wish.
Of course, the television commercial has been with us since 1955. Since its arrival, it has been one of the most, if not the most, effective creators of brands and wealth. So why is it that you can hardly pick up a marketing magazine without reading about the death of this medium?
Before you rush to the Internet, or search for some fashionable alternative media, look at these facts. The average adult in the UK watches more than 24 hours of TV every week, 60 per cent of children have a TV set in their bedrooms. One in four adults watch the soap opera Coronation Street, even more watch EastEnders. So why do we read that the likes of Cadbury, the chocolate manufacturer that sponsors Coronation Street, think most advertising is nothing but froth and are putting more money into programme sponsorship? Why did we read that Heinz was pulling out of TV advertising (it has since gone back)?
Could it be that as the medium has become more competitive some companies have found it harder to create advertising that works? The medium is not a guarantee of success. It has to be used imaginatively. Perhaps this is the heart of the problem - it's just that some companies find this process difficult to manage.
From the Financial Times