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Belch: Advertising and
Promotion, Sixth Edition
VII. Special Topics and
Perspectives
20. International
Advertising and Promotion
One of the major developments in the business world during the
decade of the 90s was the globalization of markets. The emergence of
a largely borderless world has created a new reality for all types of
companies. Today, world trade is driven by global competition
among global companies for global consumers. 1 With the development
of faster communication, transportation, and financial transactions, time and distance
are no longer barriers to global marketing. Products and services developed in
one country quickly find their way to other countries where they are finding enthusiastic
acceptance. Consumers around the world wear Nike shoes and Calvin Klein jeans,
eat at McDonald’s, shave with Gillette razors, use Apple and Dell computers, drink
Coca-Cola and Pepsi Cola soft drinks and Starbucks coffee, talk on cellular phones
made by Nokia and Motorola, and drive cars made by global automakers such as Ford,
Honda, and Nissan. 2
Companies are focusing on international markets for a number of reasons. Many
companies in the U.S. and Western Europe recognize that their domestic markets offer
them limited opportunities for expansion because of slow population growth, saturated
markets, intense competition, and/or an unfavorable marketing environment. For
example, U.S. tobacco companies face declining domestic consumption as a result of
restrictions on their marketing and advertising efforts and the growing antismoking
sentiment in this country. Companies such as R. J. Reynolds and Philip Morris are
turning to markets outside the United States such as Asia and South America, where
higher percentages of people smoke, nonsmokers are far more tolerant of the habit,
opposition is less organized, and consumers are less litigious. 3 Many U.S.-based brewers,
among them Anheuser-Busch and Coors, are looking to international markets to
sustain growth as beer sales in the United States decline and regulatory pressures
increase. However, these brewers are facing strong competition from foreign companies
that are also targeting international markets. For example, in 2002 the Miller
Brewing Co. was purchased by South African Breweries, whose largest markets are in
Asia and Africa. The acquisition gives SAB access to the U.S. beer market while
expanding opportunities for Miller brands in global markets. 4
Many companies must focus on foreign markets to survive. Most European nations
are relatively small in size and without foreign markets would not have the economies
of scale to compete against larger U.S. and Japanese companies. For example, Swissbased
Nestlé and Netherlands-based Unilever are two of the world’s largest consumerproduct
companies because they have learned how to market their brands to
consumers in countries around the world. Two of the world’s major marketers of cellular
telephones are from Scandinavian countries. Nokia is based in Finland and Ericsson
is located in Sweden. Australia’s tourist industry is a major part of its economy
and relies heavily on visitors from other countries. Australia’s major tourist markets
experienced dramatic declines in visitors following the global economic downturn in
the tourist industry after the terrorist attacks of September 11. 5 Exhibit 20-1 shows an
ad used by the Australian Tourist Commission to
attract visitors from abroad.
Companies are also pursuing international markets
because of the opportunities they offer for growth and
profits. The dramatic economic, social, and political
changes around the world in recent years have opened
markets in Eastern Europe and China. China’s joining
of the World Trade Organization in 2001 has provided
foreign competitors with access to 1.2 billion potential
Chinese consumers, and Western marketers are eager
to sell them a variety of products and services. 6 The
growing markets of the Far East, Latin America, and
other parts of the world present tremendous opportunities
to marketers of consumer products and services as
well as business-to-business marketers.
Many companies in the United States as well as in
other countries have long recognized the importance
and potential profitability of international markets.
© The McGraw−Hill
Companies, 2003
The Importance of
International Markets
Exhibit 20-1 The
Australian Tourist
Commission promotes the
country as a tourist
destination
659
Chapter Twenty International Advertising and Promotion