Centralization or Decentralization

Global advertisers are concerned with the degree to which advertising decision making and implementation should be centralized or decentralized. This decision is directly linked to the decision about whether to follow a standardized or differentiated advertising approach. Five key factors influence the choice between centralization and decentralization of the responsibility for international advertising decisions and implementation:

1. Corporate and marketing objectives. A company whose global marketing objectives dominate over domestic objectives is likely to centralize advertising and communications decisions. Where it emphasizes short-term profit and local objectives, decentralized decision making is favoured.

2. Product uniformity. The more similar the product or service marketed across different countries, the greater the feasibility of a uniform approach, which allows for centralized management of advertising.

3. Product appeal. Underpinning the product's appeal are die reasons why customers use the product. The reasons for consumption may differ among different cultures, whatever the demographic or psychographic characteristics of consumers. French women drink mineral water to stay slim; German women drink it to keep healthy. Golf club membership is a status purchase in Singapore; in the United Kingdom it is a moderate leisure activity, without the same label of exclusivity attached. Where underlying appeals vary significantly, decentralized decision making makes better sense.

4. Cultural sensitivities. Where a product's usage and appeal are culture-bound in terms of the local attitudes towards consumption, habits and preferences, ns in the case of drinks and food products, more decentralization is necessary.

5. Legal constraints. Individual country ndes and regulations affect advertising decisions and their implementation. Decentralization of responsibility, with the aim of tapping local wisdom and knowledge, is necessary where strict country regulations apply. In the European Union, until real 'harmonization' exists, cross-border advertisers must remain alert to subtle differences in nations' rides and codes of practice in order to avoid costly mistakes.

There has been a tendency for international organizations, especially in Europe, to centralize their marketing activities, resulting in more attempts to centralize the advertising function. In many product categories, including ears, durable goods, electronics products, cosmetics and alcoholic beverages. European multinationals have adopted single-agency networks across Europe. Retailers, media companies and food and drinks manufacturers, however, remain less positive about centralization as they have to respond to cultural differences and legislation.24

The modes used by firms vary. Some organizations exert tight control from the centre and exeeutionary changes for local culture and conditions are closely monitored, as in the case of Unilever's Lever Europe. Some corporations, like Nestle", grant local management some degree of freedom to develop advertising within broad strategic guidelines, but with central directives on agencies and media buying groups. Yet others, such as Heinz, have tended to give local management total autonomy in both strategy determination and local implementation of product and advertising strategies.

Worldwide Advertising Media

The international media comprise an extensive mix:

• Newspapers. Faster and more efficient circulation is possible with new technologies, such as satellite printing, which allows advertising copy to be sent by satellite to the printers. Many international newspapers (e.g. International Herald Tribune, Financial Tirnes,Asahi Shimbun, Wall Street/Asian Wall Street Journal) are printed simultaneously in more than one country. In general there have been enormous developments in local and global press, and more newspapers have gone global to reach specific audiences.

• Magazines. There are some national and international journals which carry ads that target regional, international or global customers (e.g. Fortune, News/week, Time, The Economist). Women's magazines, such as Cosmopolitan, Elle, Vogue and Harper's Bazaar, are printed in different editions for readers in different target countries/regions. And there are other international magazines such as Reader's Digest and men's magazines like Playboy and Penthouse.

• Proj'essional and technical magazines. In Europe alone, there are more than 15,000 titles, and the number is rising yearly.

• Cinema. This is a relatively popular medium for reaching younger viewers, such as teenagers. In developing and less developed nations, cinema remains important.

• Television. There are few country markets where television is not available or where advertising is not carried via that medium. Satellite and cable opportunities have expanded enormously and accelerated the use of TV for international advertising. A few stations - notably, CNN, NBC Super Channel and Eurosport - are well-recognized international media channels. Other international TV channels include Uow Jones's European Business News, BBC Worldwide, Bloomberg information's TV Europe and NBC's CNBC.

• Outdoor advertising and transport advertising. This medium is used throughout the world. In the western developed markets, advertisers are expanding their repertoire of outside media (e.g. park benches, trucks, taxis, bus stop shelters). This medium is used as an alternative in cases where the product category cannot be advertised on TV, as in the case of tobacco and alcoholic products. In some countries, such as India and the People's Republic of China, outdoor advertising has become more important.

• Interactive communication media. Interactive systems, such as videotex! and pay-TV, are gaining importance as cable TV continues to develop. Fiance's Minitel, for example, offers over 3,000 different services to subscribers.

• Radio. As a medium for international advertising, radio is constrained by availability in the sense that most commercial radio is regional. Radio Luxembourg, the international European station, transmits ads in several languages and reaches the whole of Europe.

• Place-based media. This is a worldwide development and advertisers are increasingly deploying the medium to reach audiences wherever they happen to be - at work, the fitness centre, the supermarket, airports and in the aeroplane. The programming and advertising can be produced internationally.

• Trade fairs and exhibitions. These can be costly, but are useful media for international communications.

• Sponsorship. Sponsorship of sports or art events, like the Olympic (lames and the soccer World Cup, offers vast audience reach. However, sueh global audiences are rare and the effectiveness of the initiatives is not easy to measure.

• Other media. Point-of-sale materials are not easy to reproduce internationally. Invariably, they have to be adapted to local conditions, specifically the language, regulations and distribution outlets. Direct mail is used in many countries, but it is primarily a local technique. As postal services van' from country to country, including within the EU, the medium has yet to be applied internationally. Nonetheless, credit card companies that have an international customer database can exploit this medium for worldwide communications. Online media such as the Internet are gaining recognition and organizations are increasingly investing in this channel given its potential to reach a global audience (Chapter 22 discusses online marketing in greater detail).

There have been important trends in media development worldwide. Most notable arc developments in TV and telecommunications. A second force is deregulation, which results in the proliferation of commercial TV and satellite broadcasting. In deregulated central Europe and in Asia, as state control over media relaxes, opportunities open up for advertising. Another development in the 1990s is the emergence of megabrands as a result of merger activities. Such megabrands can concentrate media buying, which in turn influences media development. Furthermore, as more companies seek a pan-European or global approach to media buying, only large media groups with a broad European or international base, owning a network of media companies worldwide - such as Berlusconi, Bertelsmann, Time-Warner and Murdoch - arc in a position to negotiate at this level and have their own grip on media developments.25

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Responses

  • abel
    Is promotional centralized or decentralized?
    6 years ago
  • Antje
    Is united kingdom a centralized or decentralized culture?
    4 years ago

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