International Advertising and Product Development in the Presentation Change Bite - Case Study Example

International Advertising Executive Summary The case study is actually a study of the Ten Changes described in the presentation Change Bite. The ten items are strategies and directions in international advertising and product development that will find relevance in the coming years. The ten changes are briefly described in the summary of pertinent case facts, and a brief discussion of the lessons learned therefrom are presented in the form of “things to do” and “things to avoid” for each item. The lessons are elaborated with real-world situations that involve the substantial issues that bear consideration in each of the ten changes. Summary of Pertinent Case Facts Change Bite is a conglomeration of Ten Changes which, as of the first quarter of 2008, were widely considered to be the best directions to take in the field of international advertising, in order to ensure a client-company’s competitiveness. It defines itself to be a change report, which, in contrast to a trend report, identifies permanent changes (irreversible shifts) in society. Among the ten changes are included: 1. From China farmland to world stage – Highlights the effect of the 2008 Olympic games on the global perception of China, from rural country to modern international metropolis; also focuses on east-west influences and the spirit of participation 2. From global village to local planet – Emphasizes on the economic power of local provenance; ethical and environmental content encourage the development of local products and services. 3. From big to nano - Small is economical; waste minimization advances the causes of sustainability as well as conserves on costs for the company. 4. From fixed pricing to opt-in pricing – Customization increases product utility and customer satisfaction while allowing the buyer to determine the price they want to pay 5. From basic to premiumnization – Emergence of markets in transformed economies, where new high net worth individuals create a demand for premium products 6. From DIY to MIY – Planning products and services in such a way as to allow customer participation in designing and making them increase customer satisfaction, save on costs, and enhance sales 7. From buying to guilt offsetting – Approach intended to diminish the “guilt” associated with certain products by lessening the undesirable element or enhancing a desirable characteristic in the product 8. From green to blue – As a matter of style, the symbolic representation of sustainability will be associated with blue particularly in branding. This provides a fresh alternative to the color green, which has worn off its impact through overuse. 9. From social networking to we-commerce – Organized mass-buying and “cooperative consumption” through the internet has eliminated the middle man and reduced costs and prices 10. From virtual to wiirtual – Boundaries between the virtual and real worlds are becoming transparent, allowing the advantages of each to be easily assimilated into and enhance the other. Lessons Learned From the Case 1. From China farmland to world stage – What to do: Use the goodwill and social capital that comes from being the center of attention in such an event. Structures set up and systems put in place to prime up for the event can become investments for exploring new opportunities. What to avoid: The Olympics has long come and gone, and China’s massive boost leading to the event may not have been sustained after the athletes have gone home. The massive infusion of investment in terms of structures and infrastructures is in danger of being laid to waste if productive activity is not engaged in after the main event, the Olympics, is over. Planning and vision are necessary for this. (De Lisle, 2008) 2. From global village to local planet – What to do: Highlight the example being displayed by U.S. First Lady Michelle Obama in planting a vegetable garden with her children in the White House grounds. Due to the economic crisis, many households have begun to tap into local resources for the essential consumer products, because these cost less and have a higher value to the consumer. What to avoid: Espouse protectionism in a world that has begun to break down trade barriers. Global trade is still a major component of the international economy and the key to the recovery from the global depression. (Tai, 1998) 3. From big to nano - What to do: Advances in digital communications technology has enabled many products to be tailored to customer-indicated specifications. Such as the release of music recordings which consumers may legitimately download depending upon their choice of titles. Batch-processed sizes may be a thing of the past, and renting (cars, clothing apparel) or time sharing (vacation homes), has become more convenient and cost effective than buying. For instance, sachet packaging of any consumable, from bathroom product (shampoos, soaps, hair conditioners, toothpaste) to kitchen condiments (soy sauce, ketchup, mayo, mustard, cooking oil) have become the norm in some countries because they command more sales. What to avoid: Size reduction does not mean segregation of essential features that go together, to the point that one segment becomes useless without the others. For instance, the marketing of certain brands of cabled routers for linking computer workstations. The unit, built for cable attachments, comes without such attachments, and a separate purchase is needed for these which the consumer may not have been aware of at the point of sale. This renders such equipment unusable unless another trip to the store is made, in order to make another purchase. This simply fosters bad consumer relations. 4. From fixed pricing to opt-in pricing – What to do: One successful campaign towards this end is the package wherein cellphones or modems are provided for free if the customer agrees to a time contract with the company for use of their mobile or wireless broadband service. This ploy has also been used by cable networks, committing to provide a fixed-term subscriber a television set to go as a package with his subscription. It is a must that something that is valuable is given for free in return for the customer’s patronage. By valuable is meant something that has substantial commercial utility, that is given at no charge. What to avoid: It is not ethical nor legal to appear to provide something of value for free, and yet attach some hidden charges or commitments which the consumer finds out later that he has to comply with after all, rendering the “free” come-on moot. This is the campaign ploy of several kitchen utility companies that will bait a customer with having won a “prize” such as a blender or a microwave oven, only for him to find out that the privilege of taking home his prize comes at the expense of purchasing five times worth more of merchandise that he had no intention of buying in the first place. 5. From basic to premiumnization – What to do: Products of quality should be manufactured and products to meet the needs of the noveau riche in the expanding markets of China, India, the Asian tigers such as Korea and Taiwan, as well as the new moneyed class in the former communist countries which are now in the process of transformation to capitalism. Many individuals are acquiring the buying power to afford more in terms of quality, status and luxury. It is important that premium products should be perceived to be worth the premium prices they command, and the perception of a product to be “premium” should be well founded. What to avoid: Products marketed as “premium” should maintain a level of exclusivity, and not be afforded to the market through other means that would lower its status ascription. The company should exert excess effort to see that the product is not leaked into the common markets as a lower-prized or bargain product. This directly addresses the problem of fake or pirated products that carry the brand, trademark or emblem of a premium product. Companies should guard against this occurrence, particularly in sub-contracting vital production stages to non-accredited outsourcers. The proper operational security precautions and legal restrictions must be drawn to ensure this does not happen. (Jones, 2000) 6. From DIY to MIY – What to do: The function of marketing is no longer to determine what the market wants, in instances when the market can determine it for themselves. Where design and/or construction of a product or service is accessible to the consumer, their engagement in this aspect can improve customer satisfaction and be of greater value to them. Computer software have been developed, for instance, that aid a customer in visualizing house improvements by creating a mock-up of paint, furniture, and curtain combinations for the home, before he makes his purchase. The same is available for combinations of wardrobe and apparel, hairstyles, car customizing, and so forth. What to avoid: What should be avoided is leaving too much for the customer to do, to the point that specialized needs may be required which he is not equipped with. Again, this renders the product or service a most unsatisfactory experience for the customer, precluding any repeat purchases. An example is the furniture, baby playpen or lawn swing assembly that the customer has to put together himself. A myriad of small-printed instructions and confusing diagrams is not going to encourage a return visit from the frustrated customer. (Walter & Murray, 1988) 7. From buying to guilt offsetting – What to do: Market products that truly provide benefits and/or eliminate elements considered undesirable for that product. For instance, food products should be formulated so as to contain healthful nutrients in significant amounts. In most jurisdictions, details of the nutrient content of food products and the amount they are present in are required to be displayed on its packaging or label. What to avoid: When a product advertises that it contains particular nutrients, the formulation should not contain said nutrients in token but insignificant amounts, merely to support the claim that it contains such. Furthermore, in the course of eliminating one undesirable ingredient from the product, manufacturers should not include substitutes that are associated with other undesirable effects. For instance, in producing sugar-free beverages, the inclusion of sugar substitutes such as aspartame that may have cancer-causing effects should be avoided. (Jones, 2000) 8. From green to blue – What to do: Products should be designed towards sustainability – to be free of pollutants or by-products harmful to the ecology, should not contain ingredients that comprise an irreplaceable resource, and at the end of its life should be recyclable or returnable for reprocessing. The most dynamic advances in this area have to do with hybrid automobile designs that run on alternative fuels that minimized harmful emissions. What to avoid: The “green” campaign has been overused in the sense that many products have advertised on the basis of environmental awareness, but the product itself has not offered any real advantage to advance the cause of preservation and sustainability. New product offerings should avoid capitalizing on the “blue” campaign merely to join the bandwagon. Environmental awareness is not a mere advertising pitch that happens to be fashionable, but a true advocacy issue that bears upon our future. (Greenpeace, 2008) 9. From social networking to we-commerce – What to do: For producers of goods and services, it is a cost savings if the middleman could be eliminated and one may proceed directly to the customer, as long as greater costs are not incurred in doing so. Likewise, the customer will benefit from the elimination of the middle man because he or she is able to avail of the producer’s price. The use of the internet and other forms of electronic communication enable this direct link. Furthermore, organized group purchases are also beneficial to both sellers and buyers, through efficiencies generated by volume movement of goods and provision of services. What to avoid: Avoid undercutting a middleman if there is one who has already sourced customers for the products. While doing so will save on costs, such a practice is unethical and denies the agent his proper compensation for bringing the business in. Also, avoid pricing much lower than the agent’s sale price or else unnecessary competition is created between the agent and his own principal. 10. From virtual to wiirtual – What to do: Ideas originate from all sources, even imaginary ones made visual or aural. Be conscious of new, abstract or fantastic subject matter generated from unconventional sources such as video games and cartoon series as they provide material for new products and services. Likewise, new technology provides the means to execute these ideas. A young animator named Lasseter watched the first Star Wars movie and, amazed by the possible application of Lucas’ computer technology in animation, came up with the digital animated film that Pixar, the company Lasseter now heads, is famous for. What to avoid: In the borrowing of ideas, one should avoid a direct plagiarism, or unauthorized use or exploitation of a design, idea or concept. Strict compliance with regulations protecting IPR rights is critical. Many lawsuits pertaining to the expropriation of snatches of a song or artistic styles or materials have cost companies millions of dollars in damages. Such fraudulent copying should be avoided. (Jones, 2000) ANNOTATED REFERENCES Greenpeace 2008, China after the Olympics: Lessons from Beijing, July 28, 2008. Available 10 July 2009 from < http://www.greenpeace.org/china/en/news/green> The article provided information on how Greenpeace rated the sustainability efforts of the Beijing Olympic committee, their strong and weak points. It provided important insight into the willingness of Beijing officialdom to comply with international standards and norms particularly concerning the environment, as Beijing has a reputation for being indifferent to issues concerning ecological preservation. The reporting was balanced and fair, reporting both good and bad aspects, and despite the advocacy stance of the writers, appears to be reliable for its detailed presentation. DeLisle, J 2008,”After the Gold Rush: The Beijing Olympics and China’s Evolving International Roles”, Foreign Policy Research Institute, Spring 2009, pp 179-204. Available 10 July 2009 from < http://www.fpri.org/orbis/5302/delisle.aftergoldrush.pdf> The study is a commentary on the apparent change in the outlook of Chinese citizens and to a degree its leadership, because through the Olympics China sought to showcase its claim as a world power, that is, economically prosperous, internationally accepted, and supportive of the international norms and regimes. Patterns of relationship between China and other world powers, predating but highlighted during the games, promise to remain salient particularly on issues pertaining to economic recovery, environmental preservation, intellectual property rights protection, and human rights enforcement. However, China still reels from criticism concerning its apparent disregard for human rights in handling the Tibetan separatist movement, the level of official corruption in bribery scandals that plagued the Olympics, and seeming continued tolerance of piracy and the production of fake or copied brands or commercial products. This is an academic study, and its discussion is well-founded, exploring both positive and negative perceptions of the issues and adopting a pragmatic approach on issues that may appear harsh. It is a well-written and highly reliable source. Jones, J P 2000, “The Vicissitudes of International Advertising”, International Advertising Realities and Myths, pp. 1-12 This is the introductory selection to an anthology of articles on international advertising, edited by John Philip Jones. The article provides an overview of the developments of international advertising and provides a view of forecasted trends and directions. Replete with details and examples, the piece provides a reliable source by which a perspective of the past, present and future of international economics may be formed. Walter, I & Murray, T 1988, Handbook of International Management, Wiley The book is a comprehensive handbook that contains contributions by other authors who are experts in the field of international management. It also includes information on the political and legal dimensions of international business, and its connection to international banking and finance, taxation, accounting, labor and public relations, and international marketing. For its thoroughness, it is slightly outdated, although much of its contents may be considered relevant still. The contents are reliable and useful for forming insights into the industry and its interrelated connections with other social and business institutions. Tai, S H C 1998, ”Advertising decision making in Asia: ‘Glocal’ versus ‘Regcal’ approach,” Journal of Managerial Issues, 22 September. Available 10 July 2009 from The author comes up with the term “glocalization” to signify the concept “think globally, act locally and manage regionally”. The study stresses the need to understand the new markets before planning their advertising strategy. The study provides an academic approach designed to be meaningful to both academicians and practitioners. Among other things, it examines the degree to which a multinational’s headquarters participates in the advertising process in local markets, and the relationship between the degree of commitment and the extent to which advertising is standardized regionally. The study provides a balanced discussion well-supported by empirical proof. It is a reliable source of information on international advertising. International Advertising Association (IAA) 2009, Guide to advertising self-regulation. Available 10 July 2009 from The circular is a brief paper that provides pointers on “Children as customers”, and on voluntary self-regulation of the Association. For the greater part, the paper is on collegial matters, but for the brief article that describes the effect of advertising on children, and finding a happy balance between airing material offensive to children, and the other extreme, the “sandbox society”. Being an issuance of the IAA, the material is apparently reliable and informative. 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